CGT loss claimed by dispoasl of asset to child.

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oldnick

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I want to give my daughter an apt on which I've made a loss and offset it against the sale of a property on which there'll be CGT.

Seperate from the gift/inheritance aspect my question is ...

For the purpose of CGT offsetting losses against gains , do Revenue accept the disposal of an asset (at true market and certified value) to my daughter in exactly the same way as if I had sold it to a stranger ?
 
"If the disposal is not made by a bargain at arm's length or where the parties are connected, for example a disposal between family members, then the consideration is equal to its market value at the time of disposal."

Definition of disposal for CGT assessment purposes.
 
oldnick said:
I want to give my daughter an apt on which I've made a loss and offset it against the sale of a property on which there'll be CGT.

Seperate from the gift/inheritance aspect my question is ...

For the purpose of CGT offsetting losses against gains , do Revenue accept the disposal of an asset (at true market and certified value) to my daughter in exactly the same way as if I had sold it to a stranger ?
Click to expand...

no. Where you make a loss on a disposal to a related party, then that loss can only be offset against gains on disposals made to the same person.

So, if you want to use this CGT loss, you'd have to sell the profit making property to your daughter too. However, the additional stamp duty and legal costs may make this prohibitive.
 
Many thanks Nige for your quick and informative response. Back to the drawing board !
 
tks also Brendan -I hadnt seen your post.
Actually what you quoted is what i believed to be the reason I could do this transaction quite legally. Am surprised that Revenue don't allow this when full proof of value of asset is provided.
 
Its an anti-avoidance thing.

Say someone has a gain on a property? and they have an asset that has a substantial loss.

They could transfer the asset with a loss in order to crystalyse the loss to set it against the gain. While you may want to transfer the assets for different reasons the connected persons restriction will still apply.
 
Yes, Joe90, I got it.
Revenue rule makes no sense in my case. I will now sell both assets on open market, offsetting one against the other and reducing CGT. Then, with some of the cash buy a small apt for daughter.. Exactly same result as my proposal- no CGT, i get some cash, and daughter ends up with a small property.
No real difference to Revenue or me except hassle and small extra cost of selling one small apt and buying anoher.
 
Does your daughter want the apartment? Would she buy it if you were not the seller?

If she doesn't, will you be able to sell it easily?

If you can't sell the apartment but can sell the other property, is there any advantage in selling both properties to your daughter and then she sells on the other property. If they are both residential, then the stamp duty might be small.

Brendan
 
Yes, the latter possibility has been outlined by most helpful poster in PM and is probably the one I may take as it's proving hard to sell the small apt despite high yield which for daughter will be tax free income.
 
It's probably hard to sell, despite the Dublin location and high yield as banks are very slow to give out money on investment properties and in addition it is getting less and less attractive to be a landlord as you know only too well !
 
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