On the assumption that stamp duty paid on the transfer of a property from father to son can be used to reduce the associated CAT liability at the time of acquisition, can it also be used to reduce any gain from the subsequent sale of the property some years later? ie Acquisition value plus stamp duty less net sale value
Stamp Duty offset
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Brendan Burgess
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I don't follow the CAT issue.
Yes, to the CGT issue. If someone buys/acquires a residential property for €500k + stamp duty, the cost for CGT purposes on a subsequent sale would be €505k plus any legal fees.
If it's a material amount, you probably should talk to a tax specialist.
For example, if dad gives the son a property worth €1m which results in CGT for the father on the disposal and CAT for the son, the CGT paid can be set as a credit against the CAT.
Brendan
Yes, to the CGT issue. If someone buys/acquires a residential property for €500k + stamp duty, the cost for CGT purposes on a subsequent sale would be €505k plus any legal fees.
If it's a material amount, you probably should talk to a tax specialist.
For example, if dad gives the son a property worth €1m which results in CGT for the father on the disposal and CAT for the son, the CGT paid can be set as a credit against the CAT.
Brendan
Stamp duty was incurred at the time of transfer back in 2010 and was used to reduce the inherited value for CAT purposes. On subsequent sale of the property 3 years later a loss was incurred, which is now being used to offset a recent gain. The question is can this loss be inclusive of the stamp duty cost if this cost had already been used in the calculation of CAT liability at the time of inheritance?
Brendan Burgess
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So you were given a gift of a property worth €100,000 in 2010.
You paid €1,000 stamp duty.
The CAT was based on €99,000
I have no idea if the allowable cost is €99k, €100k or €101k.
Brendan
You paid €1,000 stamp duty.
The CAT was based on €99,000
I have no idea if the allowable cost is €99k, €100k or €101k.
Brendan
I agree with the base of €99k for CAT, however if there had been a gain on the subsequent sale of the property, lets say it sold for €115k with €2k in selling costs is the basis for CGT a) €13k (115-2-100) or b) €12k (115-2-1-100) with the difference being the stamp duty. In other words can the stamp duty cost be used twice, initially to reduce any CAT liability and subsequently to reduce any CGT liability?