capital gains tax

[banshee]

hi......this is the senario.... i will purchase/inherit site from parents, build on same and sell. i belive that i will be laible to cgt of 20% of net profit.

So if i buy site for 130k from parents i can offset this against profit ?
What tax implications are there for parents then ?
Am i liable for stamp duty on site?

If i am gifted site under inheritance what taxes do i/parents pay ?

thanks for any info....

 

[ClubMan]

You should look at the Revenue summary guide to CGT:

6. Transfer of a site from parent to child

Section 603A Taxes Consolidation Act 1997 provides that Capital Gains Tax will no longer apply on the
transfer of a site from a parent to a child where the transfer takes place after 6 December 2000 and is to
enable the child to construct a principal private residence on the site. The site must not be valued at more
than €254,000 to qualify for the relief. However, if the child subsequently disposes of the site without
having occupied a principal private residence on the site for at least three years, then the capital gain
which would have accrued to the parent on the initial transfer will accrue to the child. However, the gain
will not accrue to the child where he or she transfers an interest in the site to his or her spouse.

The [broken link removed] may also be relevant:

A transfer of property (other than shares) to certain relatives, (e.g.
parent, grandparent, step-parent, child, brother, sister, half-brother,
half-sister, aunt, uncle, niece, or nephew). Duty in such cases is payable
at half the normal rate applicable. This relief does not apply to
leases or to transactions involving in-laws and/or cousins.

Example

A mother gifts or sells her house, having a market value of £250,000
to her daughter who is a First Time Buyer. The stamp duty is charged
at 1.5% of the value of the property i.e. £3,750. If the property was
gifted or sold to a non-relative, the rate of duty would be 3% and the
stamp duty payable would be £7,500.

Lastly if they are gifting the site then the [broken link removed] might be relevant - in particular the exemption thresholds listed [broken link removed].

If in doubt get independent, professional advice.

 

[Satanta]

If in doubt get independent, professional advice.

For something with such potentially high costs I'd sugest it could be worth seeking professional advice even if your pretty sure. You never know how you may be able to reduce some of the costs or at least save yourself some (very) large unforeseen ones down the line with the help of an expert.

Certainly do investigate it all on your own, the more you understand and are aware of the issues the more you can arm an expert with the relevant information.

 

[ClubMan]

Yes - I agree wholeheartedly.