House built in name of child, then sold - Tax Liability?

M

MoTown

Registered User
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Looking for some advice on this scenario.

Family 'A' has a home built on their own land in a rural area.
They then build another home beside this in the name of their 7 year old child. (This was allowed at the time)
This house is sold with 2 years of being built. It was never lived in.
Is there tax due on this sale?
I assume it can't be regarded as a family home as (a) It was never lived in and (b) the 'owner' was a child.
Is it more accurate to describe this as an investment home in the eyes of Revenue?
 
CGT tax applies.

Even worse, as child has owned a house, that child can never be considered a 'first time buyer' at any stage in the future.

Like Vegas where the house always wins, Revenue always win and you cannot fool Revenue!
 
Are you sure that the house owner will never be considered a first time buyer.My understanding is you remain a first time buyer
if you have not purchased a house,as distinct from inheriting or gifted.
 
How can a 7 year old own a house?

Is it a trust that owns the house on their behalf?
 
How can a 7 year old own a house?

tax avoidance????? Who financed it and where did the money come from?
 
Presumably the child received a gift of the site and the money to build the house so any gift tax implications there ? And inheritance threshold now is at least partly used up for the future ?
 
Is it possible that child cannot access the money from the sale until they're a certain age, possibly 18 or 21?
 
In some local county councils you need to be from the area to build. You also need to show a need for a house. But this requirement came in after the house was built. Had to claim a 7 year old has a need for a house while living in the family home 50 meters away?
My theory is that it was just a method used by the parents to get planning permission. Then to sell it more or less immediately, once built, for profit. As such, they were always the beneficial owners, despite what the planning application said.
In that case CGT would apply?
This is going back a number of years so revenue may also apply penalties.
 

When you say the house was "built in the name of" the child, do you simply mean that they obtained planning permission in the child's name?
 

Just as a matter of interest, what has it to do with you?
 
Without knowing the full circumstances, my 2 cents is you'll be lucky if this is treated under CGT if the house was never occupied. Sounds like it should be income tax. How much of it was a profit from building the house Vs a gain in value?

It's difficult to prove what the intent was after the fact, and having it done in the name of a 7 year old doesn't help matters.
 
 
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Not really. My point was that if someone wants to ask a question framed the way the OP has done, they shouldn't have to explain their motives to other users. If you don't have anything to add to the discussion just move on.

Maybe it's a friend or relative and they're concerned for them. Maybe they're an enemy or estranged relative and the OP wants to report them to Revenue.

Either way it's not really any of my concern; they've asked a question about money, on a site called....
 
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