Site to child - CAT Threshold?

[Mo Chara]

On gifting a site to a child, is this treated as a gift for CAT purposes? Hence, if the parent to child Group A threshold is already exceeded due to previous gifts from parent to child, will a CAT exposure arise on the transfer of the site or is there a separate exemption from CAT available on transfer of such a site?

In addition, I understand that SD and CAT liabilities would arise should the site be transferred jointly to child and spouse, however these liabilities are avoided if transferred solely to child first and then can be subsequently put jointly into spouses name. Is there any other way to get around this given that it is common mortgage requirements that property is in joint names?

Thanks

 

[Graham_07]

The thing to remember about the disposal of site to child is it is a CGT relief not a CAT one. It is a CGT relief which allows the parent not to have to pay CGT on the disposal . (Section 603ATaxes Consolidation Act 1997) If the deal does not go as it should and the child does not fulfil the conditions then the child is liable for the CGT the parent would have owed.

Accordingly the value of a site disposed to child does use up some of the child's class threshold in gifts from parents as it is not a relief from CAT.

Disposals in this fashion are supposed to be to the child, as a disposal to the child's partner/spouse do not qualify. However banks when lending will look for the site to be in joint names when granting a joint mortgage for construction of the dwelling. This relief has been around for a number of years now. I think there have been several threads on the issue on AAM. I would imagine that the banks should at this point have arrived at some mechanism which allows the child the benefit of the relief but gives them the security they need on the loan.

 

[Mo Chara]

Thanks

Understand that it is a CGT relief, however could find very little reference to CAT anywhere so thats why I was just checking.

Thanks for your time.