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Tax relief and Capital gains tax

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  • 25-04-2005 3:09pm
    #1
    mathie
    Registered Users Posts: 5,102 ✭✭✭


    Anyone know how tax relief works?
    I have a house with my sister and my sister has just bought a house with her boyfriend.

    She is about to transfer the tax relief over to her new house.

    Does that mean that half the tax relief goes with her? Or is it more complex than that?

    Also does she now have to sign the house over to me as I would be living there full time. I basically want to be sure I avoid capital gains tax. What do I need to avoid CGT?

    Thanks
    M


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    #2
    MorningStar
    Closed Accounts Posts: 3,031 ✭✭✭MorningStar


    Go here and ask them. They are actually helpful
    http://www.revenue.ie/
    Basically as far as I know tax relief for investors was re-instated which means she doesn't need to transfer it she just gets more. I'm sure she is paying tax on any rental income of course :D. If not don't apply for relief on that house but I think people should pay tax.


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    #3
    Victor
    Registered Users Posts: 78,388 ✭✭✭✭Victor


    Is the house an inheritance or did you buy together. What do the title documents say?

    CGT would only apply if the house is sold.

    Capital Acquisitions Tax (CAT) would apply if she gave you her part of the house.

    Mortgage Interest Relief applies only when you are living in the property and paying the mortgage. If she moves out and rents out her part, she effectively becomes an investor (if you bought in the last 5 years this may have Stamp Duty implications). She would have to pay tax on the rent on her half, but could write off the interest as an expense.


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    #4
    mathie
    Registered Users Posts: 5,102 ✭✭✭mathie


    Victor wrote:
    Is the house an inheritance or did you buy together. What do the title documents say?

    We bought the house togther so I'm guessing the title documents would state this.

    Would that make a difference?

    Thanks
    M


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    #5
    mathie
    Registered Users Posts: 5,102 ✭✭✭mathie


    MorningStar wrote:
    Go here and ask them. They are actually helpful
    http://www.revenue.ie/
    Basically as far as I know tax relief for investors was re-instated which means she doesn't need to transfer it she just gets more. I'm sure she is paying tax on any rental income of course :D. If not don't apply for relief on that house but I think people should pay tax.

    Thanks MorningStar I'll get on to them!
    Cheers
    M


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    #6
    Victor
    Registered Users Posts: 78,388 ✭✭✭✭Victor


    mathie wrote:
    We bought the house togther so I'm guessing the title documents would state this.

    Ideally it would have been set up with this in mind - with all the obligations to each other set out from the start.

    http://www.boards.ie/vbulletin/showthread.php?t=173124


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