Capital Acquisitions Tax – Deed of residency

indy_man

I am trying to inherit my parents house, they are both alive.

I heard that if I can place a deed of residency on the house for them then I can avoid the CAT at 33%.

Is this true, seems to good to be ture?

Thanks

Deeec

https://www.boards.ie/discussion/2058312216/capital-acquisitions-tax-deed-of-residency

Whats the value of your your parents house?

Have you received any gifts from them previously which has used up your CAT threshold?

Viscount Aggro

Dwelling house exemption. A parent has to will the property to you.

Its very restrictive.

indy_man

https://www.boards.ie/discussion/comment/121067240#Comment_121067240

Does that relate to a deed of residency?

I can't find any information about this.

Deeec

https://www.boards.ie/discussion/comment/121067255#Comment_121067255

OP you need to be living in the house as your main residence, you cant own another house and you need continue to live there a number of years after transfer to avail of dwelling house relief.

You need to give us more info regarding your situation.

indy_man

I live in and own another house, I am inheriting my parents house, I am going to place a deed of residency for them on their house.

This I thought was sufficient for me to avail of a CAT exception. Am I incorrect.

banie01

https://www.boards.ie/discussion/comment/121067423#Comment_121067423

You can't avail of Dwelling House exemption if you own or have an interest in another house.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/dwelling-house/qualifying-conditions-gift-on-after-251216.aspx

Deeec

https://www.boards.ie/discussion/comment/121067423#Comment_121067423

You can inherit up to the value of €335,000 form your parents without payment CAT. This is a lifetime limit so any gifts given to you by your parents already will have eaten into this threshold. Have you received any gifts from your parents before?

You cannot avail of dwelling house relief if you already own your own house

A deed of residency just gives your parents security - nothing to do with CAT

indy_man

I have some of my limit left over but not enough to cover the house I am inheriting. I am left with a tax bill of about 20K, so I was hoping the dwelling house relief might help. But it seems it can't in my scenario.

Marcusm

You seem to have created this phrase “deed of residency”; can you explain what you understand it to mean.

DFB-D

You mean a transfer of the property subject to a limited interest.

You wont avoid CAT, but you can postpone based on Revenue calculations.

Best to get professional advice on this.

indy_man

Thanks.

A deed of residency is a legal agreement that someone can live in a property they don't own for the rest of their lives.