You need to get professional advice.
There are 3 taxes involved:
1. Capital Gains tax, the value of the transfer will deemed to be the market value of the assets at the date of transfer. There is retirement relief to relieve this tax but there are certain requirements to be fulfilled.
2. Stamp duty, there will be stamp duty in the transfer but there is Young Trained Farmer Relief which can reduce this.
3. Capital acquisitions Tax, the gift less whatever you pay will be subject to CAT. There is agricultural relief available which may reduce this.
Get proper advice to ensure that you qualify for each of the reliefs and the tax should be minimal.
Thanks Joe. I am a young trained farmer thus should be exempt from stamp duty and CGT pending I get agricultural relief.
However, im more interested in how it would affect my parents. Im sure they would have to pay CGT. Thus, would I be better off doing a normal transfer from parent to son and saying no money exchanged hands.
Then, get a loan against the land and give it to my parents or make it available to my parents to use at will. Would a bank entertain it though?
No, you're misunderstanding things - whether your parents give you the land or sell it to you at full market value is totally irrelevant. When an asset passes between connected persons, such as parents to a child, then it is deemed for CGT purposes to have been transferred at its open market value.
So you giving your parents a nominal amount for the land has no bearing on their CGT position.
I recognise the asset will be subject to CGT but because I have the qualifications & subject to agricultural relief, then the tax payable should be minimal.
Im more concerned about my parents being subject to CGT, which to the best of my knowledge they will be unless there are reliefs or age allowances which I am not aware of.
Sorry you still don't seem to be getting it - you are conflating CAT and CGT, two separate taxes.
Your parents are exposed to CGT on transferring the land to you, unless a relief applies. As I already said, this is the case regardless of whether you give them any money in return or not.
I think you need to be clearer on what question you want to ask...?
If you transfer property to a connected person then you transfer at market value.
Are we not missing a few fundamentals here:
Market Value 5/4/74
Indexation
Current Market Value
etc
to see if there is even a gain!
Would retirement relief apply here?
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