Property Inheritance

S

Sean

Guest
We returned from abroad 5 years ago to live with my mother in her cottage. Since then we have spent over € 60,000 on improvements to the property. As a practical person, a lot of the improvements have been through "Sweat Equity". Say we inherit the property in the future and sell for say €250,000. What are our liabilities, and can we claim "Sweat Equity" against Capital Gains?
Regards, Sean.
 
If you inherit on death, you may or may not have a Capital Acquisitions Tax liability - depends on whether you have inherited / received gifts in the past.
You inherit at market value so if you sell immediately, there will be no gain and therefore no CGT payable so no need to worry about Sweat Equity - which in any event is not, I believe, accepted by Revenue.

mf
 
You could receive this property as a gidt an irrespective of other girsts received it would not be taxable

You should get some professional advice on this

stuart@buyingtolet.ie
 
As a starting point the value of the property today will indicate whether you are likely to have a CAT problem and as was mentioned, other gifts that you may have received will effectively reduce the 'threshold'. If that is even remotely likely, you should try and get the receipts for the improvements, if they or other than 'repairs'. I would have thought that you would have a case then to reduce the value for tax purposes.

If your mum is a dependent relative, and you borrowed the money for these improvements, the interest may also be relieved.

I think the Tax Office to be fair, will be helpful in advice on this, or you could discuss it with a tax professional as was mentioned.
 
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