Gifting a Site

Types of Taxes Involved:

• Capital Gains Tax
• Gift Tax
• Stamp duty

Transferring to your Children:

• There is an exemption to Capital Gains Tax here only applying to transfers to their children or jointly with that child’s spouse or civil partner.
• There is no restriction on the number of children that can receive a site.

Main rules on this:

1. Building the house can only be private residence and not renting.
2. The child cannot dispose of the site having not lived in it for 3 years.
3. The child cannot dispose of the site without building a house on the site.
4. The area of the site excluding the house footprint.

• Break these rules and the child will be liable to Capital Gains.
• If the child transfers an interest in this site to his or her spouse, this situation cannot arise.

Capital Acquisition Tax: (Gift Tax)

• This Tax will unlikey apply due to inheritances of €320,000 from a parent.
• Keep the site value as low as possible to avoid potential liability in the future i.e. inheriting from parents.

Transfers to Other Relatives:

‘Same Event Relief’:

• Capital Gains Tax incurred by the giver can be offset against any Capital Acquisitions Tax payable by the recipient.
• Either party could still have a liability in certain cases e.g. site value greater than €35,500, the recipient could have gift tax liability and the giver exempt from tax due to Retirement Relief.
• When gifting a site the giver will not be entitled to Retirement Relief if they owned the land for less than 10 years.

Also, if the giver is not entitled to Retirement relief but the recipient had no gift tax liability because the site value did not exceed their tax-free threshold.

Stamp Duty:

• One can claim back ⅔s of stamp duty paid on the cost of the site through the Residential Development Stamp Duty Refund Scheme. The main rules are:

1. Site area excluding house footprint cannot be greater than 1 acre.
2. File Stamp Duty return and receive a Stamp Duty certificate.
3. Start building a house within on the land within 30 months post date of transfer.

Any questions in relation to this can be forwarded to me through the contacts page by clicking the link below.

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