Wife inheriting shares with capital gains

The rebasing of assets on death works both ways

1990 - Husband buys Property for 100,000
2019 - Husband dies and spouse inherits property at 2019 value of 1,000,000

1999 - Husband buys Property for 172,000
2019 - Husband dies and spouse inherits property at 2019 value of 105,000
 
Gordon Gekko said:
No it isn’t. You might as well say that moving assets around so a spouse with no income can use his/her Standard Rate Cut Off Point is artificial tax avoidance.
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False conflation.

Tbe scenario mentioned above was that the recipient spouse had three months to live.
 
T McGibney said:
False conflation.

Tbe scenario mentioned above was that the recipient spouse had three months to live.
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General anti avoidance has no relevance whatsoever to a scenario where assets are transferred to a spouse who has three months to live.

It’s not ‘false conflation’…they’re both scenarios in which it’s ridiculous to suggest that Revenue would invoke general anti avoidance.
 
Gordon Gekko said:
General anti avoidance has no relevance whatsoever to a scenario where assets are transferred to a spouse who has three months to live.

It’s not ‘false conflation’…they’re both scenarios in which it’s ridiculous to suggest that Revenue would invoke general anti avoidance.
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What is your definition of anti-avoidance and how does it differ from mine, viz.?
T McGibney said:
A transaction that makes no sense in the absence of a tax advantage is the essence of artificial tax avoidance.
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Hi Tommy

It's not really your definition or Gordon's definition.

It is what sort of transactions which spur Revenue to invoke the legislation.

I very much doubt that they would pursue a widow because she transferred €300k worth of assets to her dying husband and saved €100k CGT.

They might do it if it were a transaction of €100m.

Brendan
 
Brendan Burgess said:
Hi Tommy

It's not really your definition or Gordon's definition.

It is what sort of transactions which spur Revenue to invoke the legislation.

I very much doubt that they would pursue a widow because she transferred €300k worth of assets to her dying husband and saved €100k CGT.

They might do it if it were a transaction of €100m.

Brendan
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Hi Brendan,

In a real-life situation, would you stake your livelihood on a recommendation that you knew breached the textbook definition of a tax-avoidance transaction, in the hope that Revenue probably wouldn't invoke anti-avoidance legislation if the transaction came to their attention?
 
T McGibney said:
Hi Brendan,

In a real-life situation, would you stake your livelihood on a recommendation that you knew breached the textbook definition of a tax-avoidance transaction, in the hope that Revenue probably wouldn't invoke anti-avoidance legislation if the transaction came to their attention?
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It’s why textbooks are no substitute for real life and tax practice. Have you ever worked on a Section 811 case? Do you have any idea how ridiculous these posts of yours are? General anti avoidance provisions exist to capture aggressive tax planning.

It’s not a case of Revenue turning a blind eye to what’s being discussed. What’s being discussed doesn’t constitute a ‘misuse or abuse of a relief or abatement’. If one spouse is dying it’s perfectly fine to transfer assets to that spouse, because it’s not a ‘misuse or abuse of the relief or abatement’. It’s just basic, albeit very sad, tax planning. It is analagous to moving an income generating asset to the other spouse if he or she ceases to have other income.
 
T McGibney said:
Hi Brendan,

In a real-life situation, would you stake your livelihood on a recommendation that you knew breached the textbook definition of a tax-avoidance transaction, in the hope that Revenue probably wouldn't invoke anti-avoidance legislation if the transaction came to their attention?
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As an accountant, you might not feel comfortable making the recommendation to your clients.

But as a tax payer I wouldn't think twice about doing this transaction.
 
General anti avoidance legislation is very prescriptive with tests and thresholds which need to be met. It’s what was invoked in the circa €100m Schroder synthesised bond transactions Appeal a few years ago. It’s the ‘misuse’ part that’s one of the key elements. Put simply, in the context of this discussion, there’s no CGT on death, so spouses moving assets to a dying spouse is using the relief or abatement for what it’s there for.

To try and illustrate it by way of an far fetched example, Section 811 general anti avoidance would only apply if some clever tax adviser found a technical way to make the CGT rules on death apply to companies or pets or something equally as silly.
 
Gordon Gekko said:
there’s no CGT on death, so spouses moving assets to a dying spouse is using the relief or abatement for what it’s there for.
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It wouldn't make sense in the absence of a tax advantage to transfer any asset to a dying spouse.

I think you'd be foolish going to the Tax Appeal Commission trying to argue that your client is a widow who shouldn't be hounded by the Revenue.
 
T McGibney said:
It wouldn't make sense in the absence of a tax advantage to transfer any asset to a dying spouse.

I think you'd be foolish going to the Tax Appeal Commission trying to argue that your client is a widow who shouldn't be hounded by the Revenue.
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It would never make it to a Tax Appeal because Revenue would never raise an assessment because it’s not a general tax avoidance transaction.

You do know that there are detailed tests and steps in Section 811? Genuine question, and I’m not having a go, have you ever handled a Section 811 case?
 
Gordon Gekko said:
It would never make it to a Tax Appeal because Revenue would never raise an assessment because it’s not a general tax avoidance transaction.
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Revenue raise assessments all the time when they find irregular transactions that do not take sense except as a tax dodge. Try disposing of your half share in your house to your spouse in order to contrive your satisfying the agricultural value test for agricultural relief, and you'll soon find that out.
Gordon Gekko said:
You do know that there are detailed tests and steps in Section 811? Genuine question, and I’m not having a go, have you ever handled a Section 811 case?
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You are having a go, and it's frankly none of your business.
 
T McGibney said:
Revenue raise assessments all the time when they find irregular transactions that do not take sense except as a tax dodge. Try disposing of your half share in your house to your spouse in order to contrive your satisfying the agricultural value test for agricultural relief, and you'll soon find that out.

You are having a go, and it's frankly none of your business.
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Are you aware of Revenue successfully winning a Section 811 case on the basis of someone getting rid of non-agricultural property to satisfy the farmer test and obtain agricultural relief?

I’m guessing that never happened, because in that example it wouldn’t be a ‘misuse or abuse’ of the interspousal exemptions. It would be nonsense, and laughed out of an Appeal Hearing.
 
Gordon Gekko said:
I’m guessing that never happened, because in that example it wouldn’t be a ‘misuse or abuse’ of the interspousal exemptions. It would be nonsense, and laughed out of an Appeal Hearing.
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Your latter point here is capable of being read in different ways. Can you rephrase it please?
 
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T McGibney said:
Your latter point here is capable of being read in different ways. Can you rephrase it please?
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I have zero clue what you’re getting at now.

General anti avoidance is not used by Revenue against mundane tax planning.

And to bring us back to the original point, moving gains to a dying spouse is basic, albeit very sad tax planning. It’s not that Revenue don’t look at it or ‘turn a blind eye’. They can’t look at it because of how Section 811 operates.
 
I have zero clue what you’re getting at now.
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Gordon Gekko said:
Are you aware of Revenue successfully winning a Section 811 case on the basis of someone getting rid of non-agricultural property to satisfy the farmer test and obtain agricultural relief?

I’m guessing that never happened, because in that example it wouldn’t be a ‘misuse or abuse’ of the interspousal exemptions. It would be nonsense, and laughed out of an Appeal Hearing.
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I'll respectfully ask again. Are you saying in the above context that the Revenue or the taxpayer would be laughed out of the Appeal Hearing?
 
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