Transfer of field

M

Manu04

Guest
Hi

About 20 years ago, my father bought a field which he had intended to build a house on, but he never did.

He now wants to transfer the field into my (son) name.

If he was to give me a gift me the field, and I transfer the field into my name now, and at some future date either before or after his death, I was to sell the field, I assume I'd pay the Capital gains tax from the date on which he bought the field 20 years ago?

However, if I was to wait and inherit the field, and sell it then, I assume the only CGT id pay would be any value it gained since I had inherited it?

Any info here and id be grateful.
 
I don't think you would have to pay CGT retrospectively back to time your father acquired the land. Have a look at the Revenue Commissioners website http://www.revenue.ie/ There is tax relief of 90% on the market value of agricultural land on inheritance. You could contact them to establish whether there would be any tax implications for yourself or your father if he gave you a gift of the field now, in his lifetime. Parents can gift up to Euro 6,000 (I think that's the limit?) to each child per year without tax implications and doubtless that would be higher in the case of agricultural land. If you plan to build on it that would have implications which the Revenue could also clarify.
 
I may have misunderstood - I assumed the field was part of a farm and your father was the farmer but on re-reading your post see this may not be the case?
 
Its a half acre site, not part of any farm. Most similar sites in the area have houses on them now.

My father did get outline planning permission, but this has since lapsed.
 
I don't think that you will pay tax based on the date your father bought the field. AFAIK, that sort of provision (deemed continuous ownership) only applies to transfers between husbands and wives.

Note: There is an exemption available to your father (from CGT) if you (the son) intends to build (and occupy) a house on this site as your principle private residence (PPR) for at least three years and don't transfer any interest in the house to your . See http://www.revenue.ie/leaflets/cgt1.pdf for further details.

I am not offering a professional opinion on this issue.
 
On a transfer now of the site into your name, assuming you do not qualify for the exemption CCOVICH has outlined, your father might have a CGT liability. This would be based on the difference between his original purchase price and the value given for the transfer to you. Assuming he is not a farmer over 55 ( for whom there is a possible exemption of retirement relief), there might be a CGT liability.

If you then sell or transfer at some future point, you will have to account for CGT from the date and value of transfer into your name.

If as you say, you inherit the site rather than recieve a gift of it, there is no CGT on the inheritance, but if after that you sell or transfer, you will have to account for CGT ( if any) based on the value at the inheritance date.
 
There are a couple of tax issues
1- your father will have CGT based on the difference between the cost of the sitre to him when he acquired it (or a 1974 valuation if he acquired it before then). rate of tax 20%. There is an exemption where the value of the site is less than €254k and you intend to build a house where you will reside.
2 - you will have gift tax to pay on the site. However, your parents can make a once off gift to you of up to €478,155. They can also make annual gifts of up to €3,000 each without you incurring any liability to gift tax.
3 - stamp duty will be payable on the transfer. Depending on the value of the site this could be up to 9%. However, consanguinity relief applies to half the amount opg SD payable (i.e. transfer to a son). As mentioned there is a relief from SD where site transferred will be used to construct a house to be resided in by you.

There are clawbacks of the reliefs also so you need to be careful. Tax advice should be taken in all cases where land transfers are being undertaken

As to timing - it would take a few weeks from the time contracts have been started to be drawn up to completion of the transdfer. Having it registered in land registry takes a couple of weeks/months also
 
You must log in or register to reply here.
Back
Top