Capital gains tax - Land passed to my mother when spouse died.

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FrankM

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Hi

I suppose this is 2 questions really.

Land roughy 80acres in size, passed to my mother from my father when he died around 15 years ago.
If she sells it now is she liable for CGT on it, or on a portion of it?

Selling it, and passing the proceeds of the sale to her 2 children would be cleaner than passing the land itself to them?
I believe there are limits of how much per year children can receive etc but it would be easier to sell and transfer funds rather than the land I presume?

Many thanks.
 
If your mother disposes of the land, and makes a capital gain on the disposal, then yes, she may be liable to CGT.



A child's lifetime CAT-free allowance is 335k.

In this case, it might be relevant if farming is involved, and if either child wishes to farm the land. In those cases, there may be relief from CAT available.
 
Protocol said:
If your mother disposes of the land, and makes a capital gain on the disposal, then yes, she may be liable to CGT.



A child's lifetime CAT-free allowance is 335k.

In this case, it might be relevant if farming is involved, and if either child wishes to farm the land. In those cases, there may be relief from CAT available.
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Thanks for the information, what would the CGT be calculated from for arguments sake, the land was handed down to him as far as we are aware. What value would be used to calculate the gain?
 
Not sure this is correct

There is no liability when assets are passed between spouses but the acquisition value is the original value when the husband acquired it
 
It's ok to get ideas and general information on Askaboutmoney but you should speak to an accountant or a tax consultant who would understand all the issues involved.

For example - how much is the land worth? Does the mother have other assets to give or leave to the children? Will her total estate be more than €670k which would result in a CAT liability for them.


FrankM said:
Selling it, and passing the proceeds of the sale to her 2 children would be cleaner than passing the land itself to them?
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If she sells it now and gives them the proceeds, she pays CGT and they use up some or all of their CAT allowance.

However, if she bequeaths it to them on her death, the CGT disappears.

If she gifts it to them when she is alive, as distinct from selling it and gifting them the money, then they will get a credit for any CAT liability against the CGT she pays as they arise from the same transaction.

So a tax advisor would consider all of the circumstances and come up with the best plan.

Brendan
 
Thank you for all the responses.

Appreciate the advice Brendan, and that will likely be the plan in the new year - speak to an advisor.
Brendan Burgess said:
Will her total estate be more than €670k which would result in a CAT liability for them
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Value of the land and any remaining assets would fall comfortably within the 670k total allowance for both children.

A quick bit of research on the approximate value of the land when it was passed to my mother shows there has been minimal if any gains on the portfolio that would even be liable for CGT, the land moved to her around 2009/10 and the price of land nationally was still falling.
 
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