Gift of House from Uncle and site from Father - what to do?

L

lialwarrior

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Hi All,

I have been offered the gift of a farmhouse from my uncle which is sited on my Fathers farm. I am currently living in this house and have been for over 3 years with my wife and children. I do not own any property.

From searching on the revenue web site [broken link removed] I believe I qualify for tax exemption. This house, however is still in my Grandfather’s name, it was left in his will to my Uncle (over 20 years ago!). This house will require a substantial amount of building work, which would equate to about the same cost as building a new house.

I have also been offered a site on the family farm from my Father. I should qualify for local needs and therefore should hopefully receive planning permission to build a new house.
However, if I accept the house from my Uncle first, I would lose my local needs and would probably find it very hard to obtain planning permission on the site.

I obviously want to take ownership of both these properties. Any thoughts as to how to best deal with this situation?

I will obviously seek the advice of a tax professional, but I would like to hear what people think?
 
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"However, if I accept the house from my Uncle first, I would lose my local needs and would probably find it very hard to obtain planning permission on the site."

So take the site first and then apply for planning.

The tax exemption ( CAT) is gone and now only applies to inheritance ( i.e. on death) rather than a gift.

You'll pay stamp duty on both but at half the normal rate. And the title to the house will need to be resolved so there will be quite a bit of expense involved but mind you, why look a gift horse in the mouth!

mf
 
MF1 - not sure how you figure this out.

Firstly on the gift of site from a father, where that site is under 1 acre and under €254k (may have changed in budget), then there is no stamp duty for the beneficiary or capital gains tax for the disponer. Depending on if other gifts have been received then there should be no gift tax payable either.

Secondly if the house is taken from the uncle then it shoudl be correctly transferred to the uncle from the grandfather first. This will require a bit of work but needs to eb done. The house should then be transferred to lialwarrior. At the time of the transfer he will not be beneficially entitled to any other proeprty and SHOULD still qualify for the CAT exemption on the transfer of the house. Yes, some stamp payable on the transfer of the house but nothing huge - esp if the value fo the house if done correctly.
 
mf1 said:
The tax exemption ( CAT) is gone and now only applies to inheritance ( i.e. on death) rather than a gift.
Click to expand...

This isn't quite true. The CAT exemption in gone on gifts where the donor also lives in the same house as the donee and donee was not required to live with the donor due to the donor's ill-health or old age.

So, in effect, this means that the exemption is gone for gifts between co-habiting couples or parents and children where all parties live in the house being gifted. However, if a parent buys a house, say where their child is going to university, the child lives in this house for three years (but the parent doesn't) and then the parent gifts the house to the child, the exemption will still apply.
 
Nige

Thanks for that clarification - I'd forgotten about the father/child site situation.
And I'd thought that the CAT house situation was abolished precisely because it was being abused not by co-habitees but by parent/child situations.

mf
 
mf1 said:
Nige

Thanks for that clarification - I'd forgotten about the father/child site situation.
And I'd thought that the CAT house situation was abolished precisely because it was being abused not by co-habitees but by parent/child situations.

mf
Click to expand...

I think that was the idea but they made a haimes of it so now co-habiting couples are caught if they transfer a house into both names (where they haven't contributed equally to the purchase/mortgage), but the children of parents who have enough cash to buy their little darling a house still get the relief.

Maybe today's finance bill will have some further tweaking.
 
Iceman732 said:
Transfer the house to your child!!! Would be a benefical from a tax perspective!
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1. What age is child?
2. Can a child ( i.e. under 18) own property?
3. Is it a good idea to disown assets for the sake of a tax break? Is it not better to hold on to your own assets?

mf
 
Iceman732 said:
Transfer the house to your child!!! Would be a benefical from a tax perspective!
Click to expand...

Can't see how it would be. The transfer would eb coming from a grand uncle - not a direct uncle (if we assume we are to bypass the op)

Agree with mf1 that it probably is not possible for the child (under 18) to hold the proeprty. would be held in trust. which can lead to its own tax problems.
 
I`ve been gifted 1.5 acres by my parents and intend to build on it - am I liable for any stamp duty. I am a first time buyer.
 
Hi Roadrunner

the simple anser is yes. As the site is greater than 1 acre (ignoring that it's value must be less than €254k) then SD will be payable. It doesn't matter if you are a FTB. Theres no house there at the moment.

Also, your paretns will be liable to cGT as it is over 1 acre.

My advice - reduce the size of the site for the purpose of the transfer. Ensure you get the SD off and your parents get the CGT relief. Pvt me if you need more info.
 
Thank to all for your replies. On the back of these replies, would it be a fair assessment to say I should take the following steps in order;

  • Take ownership of the 1 acre site from my father (no other gifts have been received) and apply for planning permission.
  • Assuming planning permission is received, get the house transferred from deceased grandfather into uncle’s name and then receive the gift of the house from my uncle – hopefully still qualifying for the CAT exemption on the transfer?
  • Build a new house on 1 acre site received from my father.
If the order of these steps is correct, at which stage would I have to pay stamp duty?

Also, on the transfer of house from deceased grandfather to uncle, how is the inheritance tax determined, is it on the value of the house when he was left it 20 years ago or is it on its current market value?

Once again, many thanks.
 
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