Selling jointly owned property

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galwaymom

New Member
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Hi

Parents deceased and home left to 3 siblings. Property value approx €300k .

What are the individual tax implications?

Also if a grandchild wished to purchase can they do soat below market value?

Many thanks
 
Each child is getting an inheritance of €100k

An individual is allowed to get up to €335k tax-free as gifts or inheritances cumulatively in their lifetime from their parents.

So if they have received no other gifts or inheritances from their parents, they won't face any liability to CAT.

CAT is Capital Acquisitions Tax which is also known as Gift Tax or Inheritance Tax.
 
galwaymom said:
Also if a grandchild wished to purchase can they do soat below market value?
Click to expand...

The child will be buying from their parent and their two uncles (for simplicity.)

If they buy it for €210k, they will be deemed to be getting a gift of €30k from each of them.

The child can get up to €335k from their parents in gifts or inheritances tax-free, so this won't trigger a tax liability.

They can get up to €32,500 from uncles and aunts (and some other relatives). It's important to stress that this is €32,500 over the recipients lifetime from all uncles and aunts. Not an exemption per gift or per uncle.

So they will be deemed to receive a gift of €60k.
CAT threshold: €32,500
Subject to CAT €27,500
CAT at 33% :€9,075
 
Obligatory mention of the €3,000 annual small gift exemption, which anyone can give anyone.
In BB's example, the parents and each uncle can give €3000 each without impacting the €32,500 threshold.
 
Would the child buying the two uncles or aunts out of their share and the parents gifting their child their share just be as simple and more tax efficient??

The two uncles or aunts sell their 2/3 of the property for €200k less €32.5k, so each uncle gets €83750
The parents then gifts their child the final 1/3 as an early inheritance
The child ends up paying €167,500 for the property with no tax liability and the uncles are getting close to the original value of their share
Of course all presuming none of the uncles or aunts need the full proceeds from the sale of the property and the parents are willing to gift the full value of their share
 
Last edited:
galwaymom said:
Parents deceased and home left to 3 siblings. Property value approx €300k .
Click to expand...

I forgot to mention Capital Gains Tax for the three siblings.

If the property has increased in value between the date of death (?) and the date of sale, the gain will be subject to CGT.

Let's say that the gain is €100k, each of them will have a CGT calculation as follows:

Gain: €33,330
Annual exemption: €1,270
Subject to CGT €32,060
CGT @33% €10,600

It is the value at the date of sale which matters and not the sale price. So if it's worth €300k but they sell it for €200k, they still pay CGT based on the €300k.
 
Cervelo said:
The two uncles or aunts sell their 2/3 of the property for €200k less €32.5k, so each uncle gets €83750
Click to expand...

Not sure that the house could be sold by three people with each getting a different price. Maybe they could.

If the parent wants nothing from the sale, they could give the child a gift of €100k.
Then the child buys the property for the full market value of €300k and there would be no CAT.
 
Mrs Vimes said:
Obligatory mention of the €3,000 annual small gift exemption, which anyone can give anyone.
In BB's example, the parents and each uncle can give €3000 each without impacting the €32,500 threshold.
Click to expand...
The uncle's wives can also gift 3K. And if the grandchild is married/has a partner, 3K can also be gifted to their spouse. Maybe the grandchild has children.
 
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