Is CGT charged on my father’s gift of an apartment?
Q In September 2008 my father gave me an apartment in Dublin. It was an investment property that he had for some years. There is no mortgage owing and no money changed hands. Is Capital Gains Tax payable?
A Revenue considers a gift transaction such as this to be the same as a straightforward sale, or in Revenue-speak “a gift of a PPR (principal private residence) or of an investment property and is taxed in the same manner as a sale at arm’s length of either such property”.
What is more, when it comes to calculating how much he owes, your father should know that in Revenue’s eyes he is deemed to have received the market value (as of Sept 2008) of the property. CGT has always been slightly different from other taxes in that those liable must calculate what they owe and voluntarily pay it.
To encourage compliance, Revenue recently sent letters to around 7,000 people and companies who sold property during the year ended December 31st, 2008.
There is a good section on CGT on Revenue.ie, although the “frequently asked questions” section could do with being a bit easier to follow for those not familiar with tax jargon.
Revenue also recommends that anyone who sold a property in 2008, even if it was their principal private residence and they feel sure that no CGT is due, should still make a return of the disposal/sale and claim principal private residence relief at the same time.
We’re emigrating and renting. Do we have to pay stamp duty?
Q Due to unemployment we are going to Australia for six months to see if we can make a go of it there. We will be renting out our house, which we bought in 2006, to cover the mortgage (the figures stack up). When we bought, we were first-time buyers and didn’t pay stamp duty but we were told at the time that if the property became an investment property then there would be a claw-back. We can’t manage a huge tax bill. Any advice?
A You are in the clear. If you had rented out your Principal Private Residence within two years of purchase you’d have to pay the stamp duty but, as you bought in 2006, it doesn’t apply.
However you must tell your lender, as well as Revenue (for TRS) and your home insurer as the house’s new status as a rental has implications in all these areas.
It sounds as though you have never been a landlord before so it’s worth checking out your obligations/rights as a landlord (look at the landlords rights section on www.threshold.ie) so you know how to go about your rental.
Your questions
Send your queries to Property questions, The Irish Times, The Irish Times Building, 24-28 Tara Street, Dublin 2 or email propertyquestions@irish-times.ie. This column is a readers’ service and is not intended to replace professional advice.
