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Capital Gains Tax and gifting to spouse
Auld_Reekie_2
Posts: 2 Newbie
in Cutting tax
2 brothers have owned a 2nd house since 1994 (half share each)
They plan to give half of their share to their spouses meaning each will own a quarter of the house.
When they come to sell the house will the gain for the spouses be based on a quarter of the value of the house when they received their share in 2011 and a quarter of the price it sells for? Or will it be based on the value of the house in 1994 like their husbands?
They plan to give half of their share to their spouses meaning each will own a quarter of the house.
When they come to sell the house will the gain for the spouses be based on a quarter of the value of the house when they received their share in 2011 and a quarter of the price it sells for? Or will it be based on the value of the house in 1994 like their husbands?
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Comments
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the girls share will be based on the 1994 acquisition price
do they live in the house or rent it out?0 -
Have any of the 4 lived in the house as their principal private residence at any time since 1994?0
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None have lived in the house or rented it out.
Thanks for the posts, much appreciated.0 -
It would be my understanding that when the property is gifted, then it's value needs to be established and there may be a capital gain to consider as the git would be a disposal. When the property is eventually sold, the gain for the new owners part would be based on value from now till then and for the original owners on the value from first purchase to sale. The Revenue would be able to clarify for you with a simple phone call
SamI'm a retired IFA who specialised for many years in Inheritance Tax, Wills and Trusts. I cannot offer advice now, but my comments here and on Legal Beagles as Sam101 are just meant to be helpful. Do ask questions from the Members who are here to help.0 -
Auld_Reekie wrote: »None have lived in the house or rented it out.
Thanks for the posts, much appreciated.
has the house been empty since 1994?0 -
It would be my understanding that when the property is gifted, then it's value needs to be established and there may be a capital gain to consider as the git would be a disposal. When the property is eventually sold, the gain for the new owners part would be based on value from now till then and for the original owners on the value from first purchase to sale. The Revenue would be able to clarify for you with a simple phone call
Sam
this would normally be so, but not if the transfer is to a spouse.
transfers to spouses are tax free but the eventual cgt date will be inherited by the spouse, so in this case will be 19940 -
Thanks Clapton, good to know a little more.
SamI'm a retired IFA who specialised for many years in Inheritance Tax, Wills and Trusts. I cannot offer advice now, but my comments here and on Legal Beagles as Sam101 are just meant to be helpful. Do ask questions from the Members who are here to help.0
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