Tag: children

Disposal of Site to Child

July 2, 2013

An exemption from Capital Gains Tax is available for a parent who transfers a site to a child for the purpose of building their principal private residence on the site.

The value of the site must not exceed €500,000. The size of the site must not exceed 1 acre excluding the ground upon which the residence will be built.

If the child subsequently disposes of the site or after building a house on the site has not occupied it for a period of three years, then the benefit of the exemption will be withdrawn by the Revenue. The child will have to pay the capital gains tax that the parent would have had to pay on the transfer of the site to them as well as any tax due on the sale of the site by them.

Use of Trusts & Companies

April 29, 2013

The following is a very brief summary on the implications for this type of ownership structure where parents are acquiring property for their children.

Trusts

  • Are a separate legal entity.
  • Allow control by Parents over property while it is in the Trust.

Companies

  • Are a separate legal entity.
  • Children can be equity shareholders while parents can control the company.
  • Tax problems arise on a greater scale when getting the property out of the company.

The use of these structures makes matters more complicated and professional advice should be sought in advance to consider your own personal circumstances. Generally speaking we do not recommend the use of a company for acquiring property especially where the intention is to give the property to your children at a later date to be used as their private residence.

You should obtain independent professional advice before implementing any plan involving trusts and companies to ensure that tax savings can be achieved for your own particular circumstances. We can provide this advice by way of consultation.