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Being gifted a site with FPP - CGT implications

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  • 11-09-2007 2:33pm
    #1
    menance
    Closed Accounts Posts: 11 ✭


    Hi,

    I am looking for some advise in relation to being gifted a site wit full planning permission.

    I am in the lucky position whereby my father wishes to gift me a site which has full planning.

    The problem is the land is in one of my siblings name. I understand that when recieving a gift from a sibling only the first €38,000 would be exempt from Capital Gains Tax, as oppose to €388,000 when it is gifted from a parent.

    Does anyone know of a tax efficient method of transferring the land into my name? for example, would it be more efficent to set up a company and buy the site for a nominal fee???

    Any advise would be much appreciated.


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    #2
    secman
    Registered Users Posts: 6,314 ✭✭✭secman


    How is your father gifting you a site that is in your brothers name. Is your brother aware of this ? This info would be welcome for anyone to advise you.


    Secman


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    #3
    muffler
    Registered Users Posts: 46,091 ✭✭✭✭muffler


    Moved to accommodation & property


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    #4
    ircoha
    Closed Accounts Posts: 2,290 ✭✭✭ircoha


    menance wrote:
    Hi,

    I am looking for some advise in relation to being gifted a site wit full planning permission.

    I am in the lucky position whereby my father wishes to gift me a site which has full planning.

    The problem is the land is in one of my siblings name. I understand that when recieving a gift from a sibling only the first €38,000 would be exempt from Capital Gains Tax, as oppose to €388,000 when it is gifted from a parent.

    Does anyone know of a tax efficient method of transferring the land into my name? for example, would it be more efficent to set up a company and buy the site for a nominal fee???

    Any advise would be much appreciated.

    First point here is that u are asking/almost asking for tax advice here: not done on this forum so u may get yellow carded

    Your thresholds are a bit low:
    http://www.revenue.ie/index.htm?/revguide/cat_thresholds.htm

    what value is the site?
    Is it serviced land in D4 or in TAHONW?

    Depending on where it is 50k would go along way.

    The company idea may be a runner, dont know, but it means that it will not be ur PPR and thus its sale will be taxable
    The bro will still need to sell the land to the company as it cant be gifted so he will be caught for CGT

    How long is the FPP in place, might be cheaper to let it lapse


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    #5
    Victor
    Registered Users Posts: 78,400 ✭✭✭✭Victor


    ircoha wrote:
    First point here is that u are asking/almost asking for tax advice here: not done on this forum so u may get yellow carded
    There is no problem with asking for pointers or suggestions, but for anything like this, one really needs to talk to a solicitor. Given that it is a family transaction, it would be important to get independent legal advice to avoid the transaction being challenged in the future.


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    #6
    menance
    Closed Accounts Posts: 11 ✭menance


    Icoha,

    Thanks for your reply

    I really would like to use the site to kick start a property development business, as I have a background in construction/property and always wanted to get into property dev.

    The site will be serviced and is located in the south of the country in a small development in a rural/village location.I would value the site at €200k.

    I am aware of the PPR roll over relief, but not sure how long I would have to live in it for the house to be classified as my PPR??

    I suppose a visit to an accountant will set me straight on all the tax implications and the best course of action to take..


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    #7
    dg647
    Registered Users Posts: 124 ✭✭dg647


    I would say you would be better off to contact a tax consultant, not an accountant


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    #8
    ircoha
    Closed Accounts Posts: 2,290 ✭✭✭ircoha


    menance wrote:
    Icoha,

    Thanks for your reply

    I really would like to use the site to kick start a property development business, as I have a background in construction/property and always wanted to get into property dev.

    The site will be serviced and is located in the south of the country in a small development in a rural/village location.I would value the site at €200k.

    I am aware of the PPR roll over relief, but not sure how long I would have to live in it for the house to be classified as my PPR??

    I suppose a visit to an accountant will set me straight on all the tax implications and the best course of action to take..

    Thanks OP.
    I missed last night your use of CGT, it is in fact CAT here.
    The rate is 20% so
    your exposure if u have it gifted from the bro to you is 30k, as follows
    200 - 49k exemption is 150k at 20%

    Depending on what u intend doing u could draw up an agreement with the bro that u develop the site and sell it on or what ever and cut him in for a % of the profit on sale: his minimum is 30K

    Victor is 100% right re the legal advice.


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