Transfer property to child to avoid CGT?

R

ricta

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My brother-in-law, who is a UK resident and a UK citizen, wishes to sell an Irish property valued at €88,000. He would be liable for Irish CGT of €15,800. Because UK CGT is 40%, he would have a further CGT bill there of about €15,800.
He is thinking of transferring the property to his adult child, and the child then selling the property immidiately. The thinking is that this transfer could be treated here under Capital Aquisitions Tax, having a zero tax due to the threshold; then the subsequent sale would have zero Irish CGT for the child. Would this be true? Any thoughts?

I will give him the number of an Irish financial advisor.

If anyone reading this understands UK CGT and CAT I'd be glad of your opinion from a UK Revenue perspective.

thanks and regards
Ricta
 
Don't know UK CGT but will be similar to Irish and I am sure the transfer to child will be regarded as a disposal at market value by UK CGT

Where in ireland is there a property for 88000 ?
 
Thanks, Capall. It's a share in a small property well away from Dublin!

I've been talking to someone about this since posting, and I'm told that if the child receiving the gift of the property, sells it inside two (possibly 3) years, then the child will be deemed liable for the CGT that would otherwise have been due.
 
Its impossible to comment properly on this without knowing the nature of the property (eg house/site etc). In general it seems pointless to seek to avoid CGT by gifting it to a child unless there are other circumstances that you have not told us about.

Do not under any circumstances refer this man to a financial advisor, unless they are specificially regulated for the purposes of providing accountancy or tax advice. Most financial advisors will know zilch about tax planning.
 
Thanks for the comment Ubiquitous.
To clarify on the property description, it is the ownership of an undivided 1/3 share as tenant in common of a house valued at €264000.

The UK owner of this share wants to sell it to one of the other (Irish) owners, the point he thought was valid was to avoid paying €15,800 Irish CGT on the sale by availing of the Irish CAT allowances, by gifting it to an adult child. But as I said in my previous reply it seems the child would have to wait at least 2 years before selling, to avoid this CGT accrued previous to the gifting. There's nothing more to it than that, all their other currrent and future tax liabilities are in the UK.

I should have said Tax Advisor, not Financial Advisor.
 
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