Tax is Always a Consideration
when Gifting or Receiving a Property or Inheritance
We take the time to make it easy for you
When gifting a property, Capital Gains Tax is the primary tax that needs to be accounted for and when receiving a gift or inheritance, we need to budget for Capital Acquisitions Tax among others.
There are Tax Reliefs of course, depending on your circumstances. We often compare the eligibility for these reliefs to an obstacle course, one where, we know the position, size and width of the obstacles. Thus, with some planning, we can ensure that you qualify for the reliefs you are entitled to and minimise your tax exposure.
I always got the best advice from Declan, he thought of things we hadn’t and kept things right when we were gifting land to our son.
— SMP
Any time you are entering into a legal contract it’s always best to understand the principles behind each piece of paper you sign.
The law is for everyone so we take the time to show you the options you have to make life easy for you.
Here are some of the key things to consider when gifting property or receiving a property gift or inheritance:
Taxes to Consider when Gifting/Selling
Capital Gains Tax
This may arise whether you sell or gift an asset. You are required to file a CGT return with revenue even if a CGT liability does not arise There are reliefs and exemptions and to avail of them, an application must be made to the revenue or a CGT return filed.
Household Charge
You will also have to have paid the Household Charge which was introduced for one year in 2012. proof of payment of the Household Charge is available using the revenue online website. www.ROS.ie
Non-Principal Private Residence Tax
This is a tax that was applied to second homes for the years 2009 to 2014 inclusive. It is payable to the County Council and has nasty charges and penalties for late payment. The initial charge was €200 per annum for each of the five years. So, if you are gifting or selling a second house, you will have to get either Certificates of Exemption or Certificates of Discharge from NPPR Tax or from to County/City Council,
Value Added Tax (VAT)
If you are gifting or selling a property that involves VAT, the few key words of advice I give you is, get started on putting together your “Capital Goods Scheme Records”. The buyer will ask for it.
Local Property Tax
you will have to have paid the Local Property Tax on the dwelling house which you are selling from the tax year is 2013 to the date of sale. Proof of payment of the local property tax is available using the revenue online website, ROS.
Taxes to Consider when Receiving a Property Gift or Inheritance
Capital Acquisitions Tax, sometimes called CAT.
CAT is a tax on gifts and inheritances. Spouses are exempt from CAT.
Gifts and Inheritances received the fifth of December 1991 from people in each Threshold/Allowance band, are aggregated/ added.
The CAT thresholds/allowances are;
if taken by a Child/child as deceased child: €335,000
if taken by Parent, sibling, niece, nephew, grandchild today: €32,500
any person not mentioned above: €16,250
Small Gift Exemption
Your small gift exemption in every calendar year is €3,000. You can receive a gift to the value of €3000 from any person, which is exempt from tax. If you receive gifts from multiple persons, the first €3000 of each gift is exempt.
Stamp Duty
Stamp Duty is charged on written documents, such as those that transfer ownership of land and buildings (deeds of transfer or deeds of conveyance). Stamp duty is also charged on leases.
The current rates are:
Non-Residential property 7.5% .
Residential Property 1% on the first €1,000,00, thereafter, 2%.
Leases 1% of the Annual Rent plus the SD at a and/or b above, plus €12.50 on a rent review clause plus €12.50 on each counterpart lease.
Shares, 1%, with the exception of shares deriving their value from immovable property, which attract a 7.5% rate of duty*.
*If a company owns a property. It is necessary to consider the original intention. On the Properties acquisition. If the property was acquired with the intention to realise a gain from its disposal, ie 7.5% rate of stamp duty should apply to the transfer. Conversely, if the 1% raised would apply if the property was acquired for the purpose of the company's trade.
If you’d like to get advice on the tax implications of your property-related gift or inheritance, make an appointment or fill out our enquiry form and we can start the work today on providing for the future.
Why Choose Kelly Colfer When Planning For The Future
We can meet you virtually or in person
Covid restrictions are changing all the time. No matter what they are we will always provide you with the safest and most efficient way of working together. We are familiar with multiple ways of interacting, including Microsoft Teams and Zoom We will work with whatever makes you most comfortable to bring your property transaction to successful completion.
Transparent Fees
We’ll provide you with clear and transparent pricing in advance – so you can be confident on what you’ll be paying, and what you’re getting for your money.
Where a case becomes unexpectedly complex, we’ll flag this with you immediately – so there’s never any nasty surprises!
Professional and Experienced
Kelly Colfer Son & Poyntz has been offering legal services in the South East since 1872. It's owned and operated by Solicitor Declan Joyce. With a staff that has more than 60 years of combined experience, it's one of the most trusted legal firms in Wexford.
