Selling Invest PropertyCan CGT be offset for deposit for daughter

M

martigar

Guest
Hi

I will be selling investment property soon which will be liable for CGT. As I have just given my single parent daughter a large deposit (probably more than the CGT due) for an affordable home I was wondering if I can offset this against the investment CGT?

Would appreciate any advice on this one.

Thanks
Mar
 
I don't see any reason why the gift of the cash deposit to your daughter would have any relevance to the CGT liability arising from the investment property so I too would say no.
 
Ok Thanks I obviousely got that one wrong.

Are there any circumstances where I can offset the CGT? Heard some vague info that if monies were used to buy another property which I am also in the process of and as I am in the over 50 bracket this might also be a factor??

Again any information would be appreciated.

Thanks
Mar
 
It doesn't matter what you use the money for - once you sell the asset the CGT liability kicks in an must be paid. I don't think that you age has any relevance here either. If you have a CGT liability then you can only reduce this by offsetting previously incurred capital losses against it as well as the usual things involved in calculating the assessable gain (e.g. annual CGT allowance of Eur1,270, allowable acquisition/improvement/disposal expenses, indexation of the acquisition price etc.) all of which are explained on [broken link removed]. Especially if the amounts involved are significant you should probably seek independent, professional advice from an accountant/tax professional.
 
I understand that there is some relief from CGT on property if the proceeds from the sale of the property are re-invested in another residential investment property which has at least three, and not less than the number of residential units in the old property that was sold (on condition that the property is a residential property available for letting, and contains at least one residential unit, and complies with certain Housing Regulations).
 
While I'm not a tax expert, I've never heard of any such relief. Have you got any source for this (e.g. a link to the Revenue site)?
 
If you transferred the property to your daughter than she could offset the CGT you pay against her CAT liability
 
You seem to be thinking of Retirement Relief

Retirement Relief


Retirement relief amounts to a write-off of tax from the Exchequer's viewpoint and is a very significant relief. Retirement relief is available to persons over 55 years of age on the disposal of business assets (including shares in family companies), provided that the assets have been owned for a period of not less than 10 years prior to disposal and the individual was a working director in the business during this time, of which 5 years were spent as a full-time working director. The relief is restricted to aggregate disposals of up to £250,000 where the transferee is not a child of the transferor. However, there is no such limit in the case of disposals to a child, and to qualify for relief the child must hold on to the assets which qualify for the relief for at least 6 years after receiving them from the parent.

This is an important relief in so far as the lifetime transfer of a family business or farm is concerned, where the potential CGT liability might otherwise be substantial. The relief complements the CAT reliefs for business and farm transfers and is becoming widely availed of due to the growing number of entrepreneurs and farmers who are reaching the stage where they wish to pass on their business or farm to their successors. To abolish this relief would be viewed as a retrograde step and would discourage the transfer of assets to potentially more efficient uses of the assets.
 
There is an exemption (roll-over relief) for disposal of multiple unit properties and purhcase of another
(It may have been stopped recently as I cannot not find it)

I have never used it for a client

It is not widely used as there are other taxes wihch usually make it uneconomic
(Stamp duty running at 7 1/2% - 9% for these types of property)

It is usually cheaper to pay the CGT at 20% and have done with

stuart@buyingtolet.ie
 
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