Tax Implications on Gifting a Rental property to My Daughter?

Q: I am planning to gift my rental property to my daughter and have heard there may be tax changes coming in the budget. Should I gift her the property now and what will the tax implications be for us both?

25th June 2015

A: If you gift an investment property to your daughter, you may be liable to capital gains tax (CGT) at 33% on any perceived gain. This would be calculated as the difference between today’s market value of the property and  the price you originally paid for the property.

Your daughter may be liable to capital acquisitions tax (CAT) on the gift, if the market value exceeds €225,000. Your daughter will also have to pay stamp duty of 1% of the market value of the property. This stamp duty can be deducted to help reduce the potential CAT liability for her. One other area to reduce the tax is by offsetting the CGT against the CAT liability. Revenue will allow CGT paid to be offset against CAT due, once they both arise on the same event/transaction.

The CAT threshold of €225,000 is expected to rise in budget 2016, so you may be better off waiting until then to see how the changes will affect you.

Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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1890 98 76 09

Or submit an enquiry