Gift Planning to Reduce Tax Liability

[InfoSeeker]

My parents are looking to reduce my CAT liability by transferring the house into my name in the near future as property prices continues to rise at a faster rate than the CAT exemption of €478,155 for 2006.

The issue is that they plan to give me the house and then I have to pay my 2 siblings 100k each.

House is worth approx 775K so I am presuming that the excess of 300k would leave me with a tax liability of 60k approx as well as having to pay 200k to siblings.

The 100k gift would be given to siblings on the death of my parents.

I will be seeking professional advice on this and have only started researching it but would be much obliged if anyone had any ideas so I could research these and be better prepared.

 

[bazermc]

Infoseeker

Here are my initial thoughts

The transfer of the house into your name should be free of CGT for your parents due to PPR relief, however it will be liable to stampy duty but half the rate will apply to blood relative relief -stampy duty can be avoided altogether if the transfer is made on death - inheritance as can CGT.

The gift to you will also be liable to CAT however this can be exempt if you lived in the house for 3 years prior and are not entitled to any other property at date of gift and lastly you live in the house for 6 years after

If you have to pay the €200k to your siblings on the death of your parents this would be a gift liable to tax in your siblings hands but deductible for you should you have to pay CAT on your acquisition - however only when its actually paid so it may not be off benefit now

There was an article in yesterdays SBP re. CAT relief on transfer of private residence to family
www.thepost.ie

 

[asdfg]

Would it not be possible for your parents to leave 200k to your siblings in their will and the remainder of the estate to you (unless there is something else in the estate). In order that the house is not sold you get a loan for 200K. That way you have a reduced tax bill 575K - 478K @ 20 approx 20K against a tax bill of 60K. There is also no tax liability to your siblings.
Talk to a tax advisor and mention the above and see what they think?