Help with CGT and Stamp Duty on Site Transfers

Hi
I know that this is not a substitute for professional tax advice but I have gotten conflicting advice on this from solicitor and accountant and would like to see what people here think.

6.1 acres bought in 2001 by A (father) and B (daughter) for 158,971.20 euro plus stamp duty paid of 9538.27 euro. Ownership registered as tenants in common all 6.1 acres.

2001/2002 Planning permission obtained for one house on half acre by B, house build through mortgage in Bs name with A as guarantor. A becomes ill (forced retirement) therefore from 2001 to 2003 B pays A 180,000 mostly financed by a personal loan to B (value 127,000 plus interest) from a third party who is not related.


What is required now is three separate conveyances to try and sort out this mess;

1) Transfer from A+B to B of 1 acre valued at 175,000 – on this acre sits Bs house - valued separately now at 350,000 financed by B only see above but built on the land owned by both.Total house and land 525000.
2) Transfer from A+B to B 4.6 acres valued at 138,000
3) Transfer from A+B to A 0.5 acres valued at 15,000

I would be grateful for opinions on Stamp Duty Due, Capital Gains due and anything else which may be due Im not aware of!! Also I need to know what way is the value of the house treated and as solicitor says a father/child transfer of a one acre site of this value would not incur sd or cg tax but can this apply now that the house is built? For the record the house is Bs principal private residence since 2002

B needs to get the house onto one acre in its own right in sole ownership in order to remortgage now to pay off the personal loan to the third party. Remortgage approval has been granted but this is one of the conditions of the lender.

I need to have a good idea of the issues involved so I can go back to the solicitor and make sure I do this right.
Please help….

*moved from mortgages section*

When the land was bought initially, who paid for it? What was the intention behind buying it in joint names?

What is the site worth now- is it 175000 or 350000, I'm confused. Obviously if the house were taken out of the equation.

Why is the land valued at 15000 per acre?

Why is A retaining a half acre piece of agri land ( presumably)?

Of the 180 paid from B to A- was this meant to be payment for something ie the land? Or was it a gift?

Hi Vanilla
Thanks for reply - Im sorry it is confusing - will try to clarify but appreciate your help.

Initally land was paid for by both but A paid considerably more. He took out an interest only loan of 127000. remainder was paid by savings from both. Land was in both names as B was going for planning and planned to cover costs eventually if all worked out.

The one acre site plus house is valued at 525000, 175,000 of which relates to the land and 350,000 relates to the house. Solicitor asked for it to be valued this way, even though its a bit hypothetical, as was unsure if house needed to be taken into account for tax or not.

Land valued at 15000 per acre by valuer - probably based on fact it is landlocked and based on prices in the area.

A retaining the agri land as agri land - it is very near his own house, he has no plans for it and would not be too bothered if the transfer is not possible without paying a lot of money in tax. The immediate concern is that B be able to get house land into own name. Planning is not possible on this at this time.

the 180,000 paid was to cover towards the cost of land and it is a greater amount than the original price to cover interest and also some money loaned during house build which B couldnt cover at the time It was paid back in installments some payments towards the interest only land .

At the beginning B was living at home at the time so it was decided to try initially to buy the land and hope to get B onto the property ladder, if it didnt work out we could always resell. It wasnt fully thought out. it was done in stages, land was bought, planning was a long shot but was successful so B moved into house. A was trying to help out but I will admit we were very green about the implications of all this and should have kept better records. We bought the land - primarily A paid for it but the intention was B would repay money as and when she could, if it didn’t work out we could sell.

Im sorry it is confusing - it doesnt help matters that A health is very bad and I have limited access to his records of that time. And I will admit my own record keeping was not good, was young and nieve. Problem has come to a head as I cannot remortgage now without sorting this out - if remortgage doesnt go through I will have to sell my home so really need help here as I really want to keep my house.

Monsoon said:

... - if remortgage doesnt go through I will have to sell my home ...

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If you cannot sort out the entanglements and complications, selling may not be an option either as title to the various parcels / sites would need to sorted and registered before a house sale could go through, IMHO.

Oh no - I hadnt thought of that but it does make sense. so its getting worse now.

Has anyone any ideas on this please?

Hi again,

anyone got any ideas please help?

if we just transfer one acre from parent to child - does this come under section 603A Taxes Consolidation Act 1997 (house is already built on the acre) and would we be exempt from stamp duty?

If we leave the other transfers for the moment and sort them out by each party leaving the relevant portion to the other party via their wills?

I know its a bit complex but please if anyone can help I would appreciate it - I have googled this one to death.

Monsoon said:

Hi Vanilla

Initally land was paid for by both but A paid considerably more. He took out an interest only loan of 127000. remainder was paid by savings from both. Land was in both names as B was going for planning and planned to cover costs eventually if all worked out.

. .

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It's a very complication situation, the best advice I would give it to get a very good expert on the tax implications as your solicitor is not able to manage this. There are accountants that are very good at this.

The next thing is to get the facts straight. For examply I cannot even figure out who paid what for the land in the first place. You say both bought the 6 acres but you do not say who paid what. I suggest you reforumlate the facts eg

2001

Price of 6 acres = 158000
Stamp Duty = 9000
A paid 127000 (loan)
A paid y (savings)
B paid Z (savings)

2002
Planning permission for 1 house

2003
House built
? (building costs)
Money from ?

Sometimes when you do a question a different way it can make it clearer for both yourself and people on AAM.

Hi Bronte
yes you are right - it is complicated and i will try getting the info together for a post which is clearer. Above is long winded. Part of my problem is that this all happened in 2001/2002 and my records are not great on who exactly paid for what. When I go to revenue its going to be hard for me to dig up proof of some things for example - exact build costs. It was a self build, I was very unwell myself that year and did not keep good records. wouldnt still have receipts etc I will go to the attic and dig up as much info as i can meanwhile i will read as much on revenue.ie as i can and might post smaller questions to help me piece the jigsaw together myself. at this stage im thinking it might be better to get dad to gift to me rather than the complexities of who paid what when as I honestly am not good with figures and my records are not good. my dad is also unwell and his condition is serious so I cannot be bothering him too much. thank you for trying to help me.