inheritance property

Hi, I have a question. My grandmother left me a small cottage in the country in her will. (she is dead a number of years now). I am thinking of selling this property, it is not worth much but could do with paying off some debts. When she bought the property she put it in my name in 1989 and then in her will she gifted this to me. Does anyone know the tax implications for this? I know that even now it is worth more than she paid for it. Any information would be great…

do you live in the cottage?
She put it in your name in 1989 and left it to you in her will years later? How did she give it to you twice?

Capital gains tax is levied on property which is not a principal private residence however there are exceptions such as if your granny was your dependent relative while she lived there. Capital gains is charged at 25% of the increase in value. However you are allowed to factor out inflation using a multiple provided by the revenue. I understand that the multiple is 1.5 since 1989 so there is no tax on teh first 50% gain in value.

Consult a professional tax adviser.

Ditto the consult a professional tax advisor bit.

But based on my own knowledge, if she put it in your name in 1989, then she gifted the property to you, and you were liable for Capital Acquisitions Tax from the time she did that. But only on the amount by which the value of the property exceeded the exemption thresholds for gifts to grandchildren (Category B in the current CAT regime) at the time. The worst that can happen is this: If there was a tax liability back then, you are liable for that and any interest accrued. If you consult a tax advisor, and s/he determines you have a tax liability, then as long as you approach the Revenue without any prompting from them, it is possible that they would not seek penalties, simply the tax due plus interest (which could be significant).

Here is the current setup:

revenue.ie/en/tax/cat/leaflets/cat1.html

The exemption thresholds have gone up a lot since 1989.

If you come to sell the property, the chances are that either your or the buyer’s solicitor will insist on this issue being sorted out.

There are a number of other factors which might impact on the situation -e.g was your grandmother in loco parentis -in which case CAT limit would apply as if the gift was to a child.

How old were you when it transferred to you - if your grandmother did not live there and you did for a time dwelling house relief might apply -and hey presto no CAT liability !

Does it stand on a a decent piece of ground that could be termed ‘agricultural’ - for CAT purposes the term is a moveable feast - if it falls into that category -hey presto -90% ‘agricultural relief’ BEFORE - you use up your CAT allowance !

I would consult a lawyer and tax specialist -why not consult someone who is both !
Try Suzanne Kelly -she will certainly have the answers-google her she shouldn’t be hard to find