can I gift money to my wife to buy investment property

[LouisCribben]

I'm married. My wife is a stay at home mum with no income.

I'm trying to legally lower our tax liability.

We have some savings, enough to buy a modest rental property.
All the savings are contained in assets/bank accounts in my name.

If I buy a property, and put it in my name, I'll be liable for tax on profits at my top rate of income tax.

If I "give" the money to my wife, and she buys the property, and puts it in her name, she wont have to pay any tax on profits as she has no income, and the profit on the rental property wont exceed the annual tax free allowance. Am I correct ?

If we put it in our joint names, will we be able to use some or all of my wife's annual Tax free allowance to lower our tax liability on rental profit ?

 

[Joe_90]

There is no such thing as a tax free allowance anymore.

Currently I'd imagine you are claiming the Married Persons Tax Credit so effectively you're claiming your wife's credit.

You may also be claiming the home carers credit if you have children.

So if your wife has rental income then it will be taxed at 20% she may lose the home carers credit.

So she will pay 20% tax maybe PRSI depending on the income and a lower rate of PRSI.

In principal your proposal would result in a lower overall tax liability if you are paying tax at 51%.

 

[Gordon Gekko]

As Joe 90 has suggested, the main upside is her having income at 20% rather than you having it at 40%. There's a minor USC saving too.

The possible downside is the €810 home carer credit.

 

[landlord]

Would there be a gift tax (CAT) liability if the rental property exceeds 225,000 Euros?

 

[rob oyle]

Would there be a gift tax (CAT) liability if the rental property exceeds 225,000 Euros?

Not between spouses... there is no CGT between married couples and one is assumed to 'step into the shoes' of their partner if they take an asset from the other.

CAT relates to inheritances in the main.