Tax due if Buying sibling portion of gifted house from parents

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WhaDes

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My parents house has been gifted to myself and 1 of my siblings, its worth about 190k, and we have equal share in this.

Am I correct by saying:
  1. If I buy her share from her for 95K ,she will then have to pay 33% CGT on 95k?
  2. If she gifts her 50% to me, it will work out at 95k minus 32500e (CAT B allowance) and then I pay 33% CGT on the balance of her portion.
  3. If I gift my 50% to my child, and she gifts her 50% to the same child, then my child will pay CGT on my siblings half only, so 95k minus 32500e (CAT B allowance) and pay 33% on the balance of my siblings portion?
  4. Sell the house and both of us pay 33% CGT on our portion
 
You = A
Sibling = B

(1) If B inherited half a 190k house worth 95k, and then sells the half for 95, obviously there is no capital gain, and so CGT doesn't arise.

There may have been a CAT liability at the earlier stage of inheritance.



(2) you are confusing CAT and CGT.

If your sibling gifts you half a 190k house worth 95k, then that falls into category B of CAT. Your calculations look fairly correct to me.


(3) Again, the child may have a CAT liability, not a CGT liability.


(4) if you inherited a house, and later sell it with no capital gain made, then there is no CGT. There may have been CAT at the point of inheritance.
 
If I understand what you are asking, there is no CAT due at point of the house being gifted from parent as its within the 335K group A threshold.

What is the best (least tax) way to get the house back 100% into either my name or eventually my child's name?

Thanks
 
Okay, so it looks like the inheritance and the proposed transactions aren't decades or years apart.

The first tax issue is possible CAT due at inheritance.

If the two adult children A and B have not used up their category A allowance, then there isn't any CAT due on their inheritance.

By the way, do either A or B live in this house?



Then, secondly, after that, you are asking what is the most tax-efficient was to transfer 100% ownership to person A or person A's child.

If these transfers occur soon after inheritance, then there shouldn't be any capital gains, so CGT does not arise.



(1) A buys half from B, pays the market price 95k - I can't see any tax implications here, other than stamp duty

(2) B gifts half the house to person A. Here, person A, you, will face a CAT bill, but of course you won't have paid for the half share. May also be stamp duty.

(3) Both A and B gift the house to child C. The child can get half free of CAT, and then it looks to me that the child would face CAT on the other half.


(4) if both A and B sell the house for 190k, the same value they inherited it at, then there is no CGT due.


This is complex enough, so I would wait for other posters to contribute, as I am not an expert, or else ask a sol.
 
I don't think it's that complicated once you realise that Capital Acquisitions Tax and Capital Gains Taxes are two separate taxes.

If you dispose of something where there is a gain, you will be subject to Capital Gains Tax.
If you get a gift of something and you subsequently dispose of it, the cost for CGT purposes, is the value at the date of the gift.

Assuming it's a recent gift...

1) Your parents gave you a gift of €95k each.
As it was their home, they don't face any liability for Capital Gains Tax.
The €95k each of you received uses up €95k of your €335k CAT limit. So if you got no other gifts or inheritances from a parent, then you have no CAT

2) Your sister sells you her share for €95k.
There is no Capital Gain, so there is no CGT.
There is no gift so there is no CAT.

3) Your sister gives you her share as a gift.
There is no capital gain, so there is no CGT
You have received a gift of €95k. You can get €32,500 from Group B
So €62,500 is subject to CAT @33%

You will now own a house worth €190k.

4) If you gift that to your child immediately, she will pay no CAT and you will pay no CGT

5) If you gift the house to your child when it is worth €290k
You will have a capital gain of €100k and will pay 33% CGT on it.
Your child will use up €290k of her lifetime allowance of €335k
 
Ok thanks for that explanation, let me just double check I have this correct:

Lets say I receive a gift of a house 200k from parents, and the value of that goes up over the next 20 years..
I then gift this same house to my child after 20 years and technically have made no financial gain from the house ( lets say its just sitting there and not rented , I got it and am now giving it away).
But the value of the house is now worth 300k, 100k more than when it was gifted to me.

I can gift this house to my child without any tax for them because it within the 335k threshold.
But the fact it has increased in value by 100k over the 20 years since I've owned it, I now have to pay 33% CGT on the 100k even though I have made no financial gain into my bank ac, the house is just worth more since I was gifted it, so I'm taxed on this gain.
Have I got this correct?


Thanks
 
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