Tax implications of buying site from parents?

N

Nailer00

Guest
Hi, I appreciate that this question has been asked before but the answers that people are given seem to vary im hoping sombody can advise me on the following,

My parents have a site with full planning permission for a house. The site has attracted offers of 220k so i believe this to be what its Market Value is, They have agreed to sell it to me for 100k. I am a first time buyer. They have never given my any other financial gift.

There will be no stamp duty on the site because i am a first time buyer. Correct?

Because im buying it as opposed to being given the site will my parents have to pay CGT?

Is there a better way of doing this? I would like to see my parents get as much of the money as possible

Adivce is appreciated

Thanks
 
Re: Buying site from Parents? Tax Implications

I'm not an expert but here's my two cents worth. Your parents will have to pay capital gains tax on the sale. Not only that but it will be on the market value of the site not what you buy it for.

Just because your a FTB, you're not automatically entitled to 'no stamp duty'. I think (but I'm not sure) that it will depend on a number of factors, such as size of the site etc. If you are liable for stamp duty then you would also be entitled to consanguinity relief.
 
Your parents could gift you the site for no value on the declaration that it be used to build your own private family residence, thereby attracting no CGT. In terms of stamp duty the rate will be 0.5%(Half normal Value) of the market value, as it is a transaction between related parties.

You can gift €50,815(47,815 + 3,000 exemption) tax free to your parents as stated below:

A threshold of 47,815 euro applies to gifts/inheritances made by a person to his/her parent, brother, sister, niece, nephew, or grandchild. In certain circumstances, a parent taking an inheritance from a child can qualify for the 478,155 threshold.


Somebody else may be able to clarify if you could gift 47,815 to each parent. You can always gift €3,000 (annual exemption)each year to them tax free which may also suit.
May not suit you, but its an option at least.
 
hjrdee said:
Your parents could gift you the site for no value on the declaration that it be used to build your own private family residence, thereby attracting no CGT. In terms of stamp duty the rate will be 0.5%(Half normal Value) of the market value, as it is a transaction between related parties.

You can gift €50,815(47,815 + 3,000 exemption) tax free to your parents as stated below:

A threshold of 47,815 euro applies to gifts/inheritances made by a person to his/her parent, brother, sister, niece, nephew, or grandchild. In certain circumstances, a parent taking an inheritance from a child can qualify for the 478,155 threshold.


Somebody else may be able to clarify if you could gift 47,815 to each parent. You can always gift €3,000 (annual exemption)each year to them tax free which may also suit.
May not suit you, but its an option at least.
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Thats the most helpfull advice ive had yet thanks guys
 
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