Hypothetically speaking we have a client who has farmland and a number of daughters.
He is proposing to transfer some land worth €1,000,000 to one of his daughters.
As he has farmed the land for years he does not pay Capital Gains Tax.
His daughter who is living in Dublin training in Childcare has no assets so qualifies for Agricultural Relief for Capital Acquisitions Tax so the value of the gift is reduced by 90% to €100,000 which is below the Class A threshold so no CAT is payable. Now she has to hold the land for 6 years to avoid a clawback but that's not an issue.
He has some money on deposit and is proposing to purchase a house valued at €250,000 for his daughter in Dublin. He proposes to transfer the property to his daughter in 3 years (he will suffer the CGT if any) but his daughter would be exempt from CAT under the dwelling house exemption.
So the daughter will be qualified in 3 years and proposed to run a Childcare business from her house earning €15,000 per annum. This income is exempt from income tax under the Childcare exemption.
The father has arranged with a local farmer to rent the daughters land for €15,000 per annum this is exempt under the farmland leasing exemption from 1 January 2015.
His daughter will also rent out a couple of rooms in her house when she gets it earning €10,000 per annum this is exempt under rent a room relief.
Comments welcome.
He is proposing to transfer some land worth €1,000,000 to one of his daughters.
As he has farmed the land for years he does not pay Capital Gains Tax.
His daughter who is living in Dublin training in Childcare has no assets so qualifies for Agricultural Relief for Capital Acquisitions Tax so the value of the gift is reduced by 90% to €100,000 which is below the Class A threshold so no CAT is payable. Now she has to hold the land for 6 years to avoid a clawback but that's not an issue.
He has some money on deposit and is proposing to purchase a house valued at €250,000 for his daughter in Dublin. He proposes to transfer the property to his daughter in 3 years (he will suffer the CGT if any) but his daughter would be exempt from CAT under the dwelling house exemption.
So the daughter will be qualified in 3 years and proposed to run a Childcare business from her house earning €15,000 per annum. This income is exempt from income tax under the Childcare exemption.
The father has arranged with a local farmer to rent the daughters land for €15,000 per annum this is exempt under the farmland leasing exemption from 1 January 2015.
His daughter will also rent out a couple of rooms in her house when she gets it earning €10,000 per annum this is exempt under rent a room relief.
Comments welcome.