If a person was to live in a house their parents previously rented out what would be the consequences of eventually signing the house over the child? For example would the child have to pay inheritance tax and would the parents have to pay CG tax as it was never their primary residence?
If the child lives in the house for 3 years and has no other interest in any residential property, then the gifting of that house to them will not be subject to gift tax (and won't eat up part of their tax free threshold from their parents).
However, on gifting the property, the parents will be deemed to have disposed of it for market value and will be subject to CGT at 20% accordingly.
Is a handy relief, but also beneficiary must continue to live in the house as their only or main residence for the 6 years following the gift.
Am I right in assuming that the CG tax will be caclulated at 20% of the difference between the buying price and the current market value? If so, they'd be looking at paying an estimated 100,000euro on a property bought 26 years ago for a very small sum. Is there anyway to get legally get that figure down? For example taking inflation etc. into account?
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