Tax liable on site form Parents

V

vicar

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Tax liable on buying site from Parents?Gift or buy??

Hi,..
Hope this is in the right forum..
My parent s house sits on a site which they own (1/2 acre) and are willing to gift me half of this (approx 1/4 acre) , I would rather pay them for this as they are getting on a bit and I would feel better knowing I paid for the site and helped them have a comfortable retirement, my question is which is the best way to do this deal in such a way to minimise tax and to maximise the amount of money they can get for the deal. I will, subject to planning be building a house which will be my PPR. I know you can gift 46,000 odd euro to a parent without tax but obviously the site would be worth much more than this. The site is worth approx €150,000 at current market value.
Sorry if this all sounds a bit odd but I really want to do a deal which sees them earn a reasonable amount from the site and which lessens the tax bill
Tks in advance!
V
 
Re: Tax liable on buying site from Parents?Gift or buy??

pay it over time
 
If you buy the site at full market value from your parents, there is no gift to them or from them. If you buy at part of the market value, then there is a partial gift to you of the market value less the amount paid. You can take a gift of up to €466,000 or so from your parents free of Gift tax, although any other gifts from them to you are counted as part of this threshold from about 91 or thereabouts. If they have never transferred such a site to you before they may qualify for an exemption from CGT and you may qualify from an exemption from stamp duty, as it will be your ppr. You should talk to your accountant or solicitor who will be able to advise you further.
 
could you pay each parent the threshold amount of you say 46000? Additionally, you could then gift each of them 3000 p.a for the next 10 yrs, or 15 to make up the time value of money.
What I am suggesting is that they gift you the site, you gift each of them 46000. Then as each individual can receive 3000 p.a tax free in gifts, pay them that way.
What I don't know is if they count as individuals, often tax wise spouses are treated as one person. Would be interested to know what anyone things of my (probably ridiculous and complicated) suggestion.
 
could you pay each parent the threshold amount of you say 46000?
Click to expand...

The point is that if money is paid for a site, then no gift is involved, therefore the threshold from child to parent does not apply.
 
Not necessarily, my parents gift me a site, it is within the threshold, hence no taxes payable by anyone. At a later date, I see that my parents are not as financially secure as I feel they deserve to be, so i gift them money. Surely the cold hearted revenue would not tax that gift (I'm sure the Indo would have it as headline news!!)
 
Yes in your scenario there might be a gift depending on the threshold, however I was responding specifically to Vicars situation.
 
I'm in the process of selling a site to my parents. We have agreed a price which is about half the recomended market value. What is the best way of transferring ownership to limit Tax.
 
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