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Capital Gains Tax

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  • 01-11-2014 6:16pm
    #1
    INEEDANID
    Closed Accounts Posts: 381 ✭✭


    Hi All

    Just looking for some advice.

    My grandparents who I am close to are leaving me their house in their will.

    Hopefully this will not happen for along time but I'm quite worried about the capital gains tax.

    I don't live there and am in the process of buying my first house at the moment.

    Is there any way around this or to minimise it?

    All suggestions appreciated.


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    #2
    Claw Hammer
    Registered Users Posts: 6,239 ✭✭✭Claw Hammer


    INEEDANID wrote: »
    Hi All

    Just looking for some advice.

    My grandparents who I am close to are leaving me their house in their will.

    Hopefully this will not happen for along time but I'm quite worried about the capital gains tax.

    I don't live there and am in the process of buying my first house at the moment.

    Is there any way around this or to minimise it?

    All suggestions appreciated.

    Your issue is with Capital Acquisitions Tax not Capital Gains Tax. Go to a tax adviser/planner.


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    #3
    earlyevening
    Registered Users Posts: 1,331 ✭✭✭earlyevening


    33% tax on inheritance from a grandparent over about 30k.

    The only way I can think of to avoid it is the dwelling house relief clause which you wont qualify for.

    To avoid the tax under that clause you need to have lived in the inherited property for 3 yrs before and five years after the inheritance and not own another property.


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    #4
    Victor
    Registered Users Posts: 78,423 ✭✭✭✭Victor


    We don't know your family situation.

    It may be more tax-efficient for grandparents to pass it to your parents and for them to pass it to you, but that depends on parental good will.


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    #5
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Cleanest way of doing this- is to have the property valued. Calculate the CAT due on the transaction- and organise a mortgage for the sum- when it comes due (you'll have plenty of time, don't worry- will probates can take months- and the property won't be signed over to you before any will(s) are probated).

    I wouldn't necessarily get parents involved- even the limits for a child inheriting from parents have dropped remarkably- its highly likely there would be a tax demand come what may- obviously higher, as a grandchild, your allowance is only 30,150- whereas your parents allowance would be 225k

    Also- keep in mind- the tax rate over the allowance is a flatrate 30%........

    If it is indeed your grandparents intention that you get to keep the property- now might be a good time to sit down and do a little inheritance planning with a tax consultant- when its in everyone's interests to do so- and before the dreaded event happens.

    Also- keep in mind- if your grandparents are placed in a nursing home at any stage- there may be a lien on their family home which the HSE may expect to be satisfied at a future date (so the 30% CAT- may have other costs too).

    You need to sit down and do some proper planning here..........


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