Question about Tax Exemption for Dwelling House - CAT 10

[theroux]

The rules for Tax Exemption for Dwelling House - CAT 10 are located on the revenues site.

My mother lives alone in a house in ireland which I, her only child, grew up in with her. I have left home to live in the UK where I could find work (I tried finding work related to my field in Ireland but failed).

My intention is, and always has been, to one day return to Ireland and live in that home. My mother (age 70) is now upset to learn that since the house is valued at circa €400,000, that should she, god forbid, pass away I may have to sell the house to pay for the tax bill since the tax free threshold is now €225,000. There is a exemption for those who have lived at home with their aged parent, and this was the case with me up until I had to move to the UK for work. I have been living in the UK for 3.5 years and would certainly like to live at home if it was possible. My mother would ideally like to put the house in my name at the earliest opportunity.

I notice in the rules however for tax exemption it says towards the end "A recipient absent during any time through working abroad is considered to remain in continuous occupation of that dwelling house."

Would that apply to me? Or is that referring to something else?

Any other thoughts related to the situation would be appreciated as we are very confused as to how to make sure I get to keep the family home.

 

[theroux]

Just to clarify, here is the full wording

Tax Exemption for Dwelling House - CAT 10

Introduction

Section 86 of the Capital Acquisitions Tax Consolidation Act 2003 provides that gifts or inheritances of a dwelling- house taken on or after 1 December 1999 will be exempt from capital acquisitions tax provided the following conditions are complied with -

a. The recipient must have occupied the dwelling- house continuously as his/her only/main residence for a period of 3 years immediately prior to the date of the gift/inheritance. Where the dwelling- house has directly/indirectly replaced other property owned by the disponer, this condition may be satisfied where the recipient has continuously occupied both properties as his/her only/main residence for a total period of 3 out of the 4 years immediately prior to the date of the gift/inheritance.
b. The recipient must not, at the date of the gift/inheritance, be beneficially entitled to any other dwelling- house or to any interest in any other dwelling- house. The Revenue's view is that a dwelling-house means a building or part of a building being used or which is suitable for use as a dwelling.
c. Gifts taken on or after 20 February 2007: Any period during which a donee occupies a house that was during that period the disponer's only or main residence will be disregarded as a period of occupation in that house unless the disponer is compelled, by reason of old age or infirmity, to depend on the services of the donee for that period. Old age refers to a person aged 65 or over.
d. Gifts taken on or after 20 February 2007: The house must be owned by the disponer during the 3 year period prior to the gift and, where the gifted house has replaced another property, each house must be owned by the disponer for the relevant part of the 3 year period that it was occupied by the beneficiary.
e. The recipient must continue, except where such recipient was aged 55 years or more at the date of the gift or inheritance or has died, to occupy that dwelling- house as his/her only/main residence for a period of 6 years commencing on the date of the gift/inheritance. Where the dwelling- house is directly/indirectly replaced by other property, this condition may be satisfied where the recipient continuously occupied both properties as his/her only/main residence for a total period of 6 out of 7 years commencing on the date of the gift/inheritance. A recipient absent during any time through working abroad is considered to remain in continuous occupation of that dwelling house.

The exemption will not be withdrawn where a breach of the condition referred to at e) above is as a result of the recipient requiring long term medical care in a hospital, nursing home or convalescent home or as a result of a condition being imposed by an employer on a recipient to reside elsewhere.

July 2011