Tax efficient way of transferring property

Feemar5

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Son has old house value in the region of 60K in which his sister lives rent free. What is the most tax efficient way to transfer the property into her name. I understand she would have to pay gift tax on anything in excess of 32,500 plus the 3000 annual exemption. She would not qualify for a mortgage as she has just started work and has no savings history. If parents buy property from son and then transfer to his sister would that be a more efficient manner. Is there any other taxes involved apart from CGT which he would have to pay on increase in value of property since he purchased it.
 

RedOnion

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Really depends on what the aim is.

Purchaser would have to pay stamp duty.
Assume 2 X legal fees to transfer.

Parents could provide loan to daughter. She purchases house from son. Assuming both parents are living, they could 'gift' daughter 6k per year, by writing down the loan balance. Or, they could get repayments if the intention isn't to gift.

Or parents gift the full purchase price to daughter, and it uses part of her lifetime Group A inheritance threshold. She buys house from brother.
 

The Horseman

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Son has old house value in the region of 60K in which his sister lives rent free. What is the most tax efficient way to transfer the property into her name. I understand she would have to pay gift tax on anything in excess of 32,500 plus the 3000 annual exemption. She would not qualify for a mortgage as she has just started work and has no savings history. If parents buy property from son and then transfer to his sister would that be a more efficient manner. Is there any other taxes involved apart from CGT which he would have to pay on increase in value of property since he purchased it.
How much is cgt? With the expected fall in property prices being suggested might be worth holding until no cgt due.

Then parents gift money to sister to purchase property from you or you gift group b threshold plus 3k yearly gift and parents gift difference to sister being 6k with bal from their group a threshold to your sister thereby retaining more of group a threshold for future inheritance.
 

Feemar5

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CGT would be on approx 15k at the moment but prices will probably fall a good bit.
 

The Horseman

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I think that’s the gain, not the tax.
The original post states 60k value, if it is the gain how likely is the value to decrease by the 60k to eliminate the CGT liability. 60k drop on a property of 500k would be plausible, 60k drop on a property of 200k a bit less likely (although not impossible).
 

Vanessa

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Really depends on what the aim is.

Purchaser would have to pay stamp duty.
Assume 2 X legal fees to transfer.

Parents could provide loan to daughter. She purchases house from son. Assuming both parents are living, they could 'gift' daughter 6k per year, by writing down the loan balance. Or, they could get repayments if the intention isn't to gift.

Or parents gift the full purchase price to daughter, and it uses part of her lifetime Group A inheritance threshold. She buys house from brother.
There are two possibilities which I have had some experience of but would advise that if used be sure to run by an accountant first.
1. As you state use of some of the life time inheritance figure
2. Use of the Gift Tax, 3000 per donor
I can't see where that level of CGT is coming from
 

huskerdu

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The OP said the house is worth €60k. As we don’t what he paid for it , no one here as any idea what that the gain is , so cannot estimate the CGT.
 

Pugmister

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Son has old house value in the region of 60K in which his sister lives rent free. What is the most tax efficient way to transfer the property into her name. I understand she would have to pay gift tax on anything in excess of 32,500 plus the 3000 annual exemption. She would not qualify for a mortgage as she has just started work and has no savings history. If parents buy property from son and then transfer to his sister would that be a more efficient manner. Is there any other taxes involved apart from CGT which he would have to pay on increase in value of property since he purchased it.
Is your son living in the house presently along with his sister ?

If the sister is living rent free, would the value of the rent annually not be considered a taxable gift from him to her ? The rent in theory could be set at €250 a month therefore being covered by the 3k annual exemption hwoever im not overly familiar if the market value or notional value of the rent would be the figure taken when assesing the taxable element
 
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