Gift or Inheritance Tax

I am an only child with one parent still alive. My dads house is worth about €500,000 he has no other assets. I am married and own my house. Is there any way to avoid gift ot inheritance tax on the house ?

Well I suppose if you wanted to be facetious you could suggest that he leave it to charity!

He could gift a portion of it to you now ( which would be tax free if you were still within the tax threshold) and hope that the threshold would have increased by the time he dies.

He could structure his will so that other people ( charities, grand children, friends, etc.,etc.) also benefited but I'm assuming that that is not what you want.

mf

As the annual exemption is only €1250 there is not much advantage in gifting such a small portion of the house. I can't see the advantage of gifting within the threashold as opposed to waiting for the inheritance as its all taken into account anyway!.

The Capital Acquisitions Tax threshold is E466K not E1250.00 and if your father lives a very long time then there is a chance that the threshold will rise substantially so that when this gift and a future inheritance are aggregated that the inheritance may still fall within the allowable threshold.

mf

Thanks MF.
I reckon then the best thing to do is take €50k p.a as a gift and hope the exemption limit rises faster than the value of the house. As a matter of interest, on inheritance can I pick the estate agent to do the house valuation or do Revenue do it?.

I reckon then the best thing to do is take €50k p.a as a gift

No - if you are taking an interest in the property, take it as
much in one transaction ( subject to your father being willing to do this and him taking independent legal advice) to avoid annual transaction costs.

As a matter of interest, on inheritance can I pick the estate agent to do the house valuation or do Revenue do it?.

Well, if you are not hitting the tax threshold, you don't need to do a return. To make sure you are corect on values then you should get a written valuation from an estate agent of your choosing - be careful, make sure that they know that their valuation is always open to scrutiny from Revenue. If Revenue are not happy with the valuation ( and at this stage most estate agents are canny enough not to fall into the trap of artificially deflating property values that may be scrutinised by Revenuer) they will have their own Valuation Office carry out a valuation.

mf

Thanks again for the great advice MF. I really appreciate it.

Need to watch that by taking this gift that you eliminate other thresholds (i.e. they are not separate) and if you get other gifts these may be taxable.