Do Children have a tax free allowance

B

Bray

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Can you give your very small children a once off gift of the house that you are renting and not pay tax as they may have a tax free allowance...or am I pushing my luck.!
 
Tax free allowances (or credits) usually refer to income tax. However the gift of a capital asset would involve Capital Acquisitions Tax (i.e. Inheritance Tax or Gift Tax). There are fairly generous exemptions from gift tax for gifts from a parent to a child. See and [broken link removed] for more on Capital Acquisition Tax and Gift Tax exemptions.
 
Thanks so much Clubman,I get you about If we gift the house to the child,but how do we account for tax on the rental income.The situation being say we bought the house for 100k and still have a small mortgage of say 50k on it but the property is worth 400k.thx i advance
 
Well, I know that a child's tax free allowance/credits were relevant in the case of covenants years ago so perhaps other income in the child's name qualifies for the same treatment? However I would strongly urge you to get professional advice on these matters (i.e. gifting the property to the child and the tax treatment of rental income thereafter) before making any decision. A professional tax advisor should be better placed than many contributors to a bulletin board such as this to give comprehensive and accurate advice.
 
Thanks Clubman, another minefield I guess!!!I appreciate the reply. Regards Loughshinny
 
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