If you are considering providing a dwelling house to your child or someone other than your child, please contact Cantillons for advice in view of the significant restrictions to the exemption for Inheritance and Gift Tax.
The Finance Act 2016 abolished the generous exemption from Inheritance and Gift Tax for dwelling houses. Before the Finance Act 2016 was signed into Law a parent could bequeath or gift a dwelling house tax free to a son or daughter. As a result of the 2016 Act a much more restrictive exemption applies.
The amended exemption only applies to inherited property unless the dwelling house is taken by way of gift by either a dependant relative or a person who becomes the beneficial owner within two years of the date of the donor’s death. A dependant relative is a relative who is either,
The following are the main conditions that must be met for a claim for exemption from inheritance tax to succeed.
It is important to note that the exemption is withdrawn if the dwelling house is sold or disposed of within 6 years from the date of the inheritance and the entirety of the consideration for the sale is not used to acquire a replacement dwelling, or if the successor ceases to occupy the house as his/her only or main residence during the same period of 6 years. These restrictions do not apply where the successor is aged 65 or over at the date of the inheritance or where he/she is unable to reside in the house as a result of employment requirements or inconsequence of infirmity.
Contact us at Cantillons Solicitors at +353 (0)21 -4275673 or firstname.lastname@example.org if you would like more information.
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