Property swap between brothers, any tax implications

J

JohnDung

Guest
Myself & my brother have inherited joint ownership in an old house. We intend to do a swap,I giving him a site worth 100K for his share in the house (worth about the same) leaving me the full owner of the house. I may live in this house some time in the future. Would I or my brother have to pay transfer tax?
 
3 potential tax charges could arise

1)Capital Gains Tax-You will be both deemed to have made a disposal at market value of your property. As the house was inherited at market value recently there should not be cgt on the disposal of the 1/2 share. Will be CGT on the site disposal depending on its original cost

2)Capital acquisitions tax if there is a gift element for either party

3)Stamp duty on a site of 100000 would be 6000 with family relief bringing this down to 3000
 
A variation on this query - two brothers inherit a house worth €200,000 today. No inheritance tax liability for either brother now. One brother buys the other one out for €100,000, then sells the house later for more than €200,000.

How is the taxable gain calculated?
 
Brother A is selling his half share to brother B, market value applies so its half the value of the property. So brother A has a CGT disposal if the value is higher than the E100,000 he has a liability.
Brother B is deemed to acquire the second half for the market value. So the base cost is E100,000 + half the market value at date of transfer.
 
Thanks Joe,

My understanding is that Brother A will sell his half to Brother B for full open-market value, so that eliminates any question of CGT now.

House hasn't changed in value since date of inheritance so Brother B will be deemed to have acquired at €200,000 when he sells.
 
Hi

I've a question about land swap between myself and my father.I have approx 3 hectares which I bought in 1995 for about £13,000, which I now want to swap with my father for approx 3.5 hectares(this land has being in the family for years), What are the tax implications if any in doing this transfer?
 
Are you a farmer? Do you spend not less than 50% of your time farming? You may qualify for farm consolidation relief, do a search on the www.revenue.ie website for the conditions that apply.
 
Sorry, meant to say although my father is a farmer ,I'd not be classed as a farmer for the farm consolidation relief as I'm a PAYE worker.
 
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