Tax on house getting a divorce

W

Wexfordgirl

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Hi, was married and separated in the UK. Came back home about 7 yrs ago and about 2 yrs later, my ex bought a house for my son and I to live in. We are now getting a divorce and he says he will sign the house to me for my son but would I have to pay CAT. I'm not sure if we are legally married as far as this tax is concerned. I claim one parent family here but not in the Uk, as I worked there. In the UK I just told the tax office when we separated but apart from that, we have sorted everything out ourselves.
 
You need proper legal advice here. Go to a solicitor. The transfer of a property between spouses is not a chargeable event, so it should not attract CAT, however you need to be certain that the whole transfer is done correctly so that this applies.
 
Thanks for answering creme egg. I'm going to get a solicitor but thought I'd ask here in the meantime.
 
"We are now getting a divorce and he says he will sign the house to me for my son but would I have to pay CAT."

You are married until you are divorced so a transfer of assets between you would be tax free when you're married or if it is done on foot of a Court Order

mf
 
Hold up for a second here. Its not as simple as a spousal exemption when it comes to cross border transactions I'm afraid. Alot comes down to your Domicile which I believe from the above maybe Irish. It may also come down to your ex's domicile of choice too. Which I think is UK above. Very basic test would be Was your dad Irish domicile?(Your domicile of origin) and where do you plan to die(Domicile of choice) would be the basic plain text tests. You can read the case law etc but that is a basic breakdown.

To further explain CAT, I believe you will be clear in the ROI in relation to CAT as your husband and wife as the above posters suggested. It is called the spousal relief. I however think what your husband was referring to was the UK treatment which will be different depending on the value of the property. UK IHT

See extract from UK publication "Married couples and registered civil partners are allowed to pass assets to each other during their lifetime or when they die without having to pay IHT, provided that both spouses are domiciled in the UK. However, the relief does not apply (apart from the first Stg£55,000 of value transferred) where the spouse/civil partner receiving the benefit is not domiciled in the UK and the spouse/ civil partner providing the benefit was domiciled in the UK.". You will have to look into this with your ex's tax advisor in the UK. I'm not knowledgeable enough to give you the in's and out's of the UK tax system but I do think this could be an issue for you and your ex spouse. This is a good article on it:

http://www.ohanlontax.ie/downloads/Cross-BorderInheritanceTaxInIreland.pdf

Did the property gain Value since acquisition? If it did its a CGT chargeable asset to your husband as it Irish Source Property. If yes your ex will have to consider Capital Gains Tax regardless of his Residence. The spousal exemption for CGT does not apply if you are living apart. However if the asset is passed under a court enforced deed of separation or divorce his in the clear which might be the case but depending on if the property has a latent gain/loss there could be advisable Tax Planning.

You are clear for Stamp as the spousal exemption applies there.

Not too many solicitors will know the ends and outs of this stuff so be careful. This is a territorial transfer and is never as simple as a domestic transfer. Best of luck and let us know how you get on.
 
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