Question: I have some land which I am thinking of transferring to one of my children. I note that the Minister for Finance has announced significant tax changes in the National Recovery Plan. Will these affect me?
Answer: Although most of the media comment in relation to the National Recovery Plan has been directed at the substantial increases in income tax and cuts in social welfare, the Minister for Finance laid down a clear marker in relation to capital taxes. He announced that for both Capital Gains Tax (CGT) and Capital Acquisitions Tax (CAT) the systems, structures and thresholds will be reformed in 2012. The general view is that the rates (currently 25%) will go up and the tax free thresholds will all come down. The reliefs and exemptions from CGT, CAT and Stamp Duty will either be abolished or significantly restricted.
The transfer of land within a family currently has the benefit of a number of exemptions and reliefs, e.g. Retirement Relief for CGT and Agricultural Relief for CAT. It is widely expected that these reliefs and other reliefs like the exemption from CGT and Stamp Duty on the transfer of a site will be affected by the proposed measures and therefore I would be inclined to take action sooner rather than later. This would apply equally to anybody thinking of transferring a property or a business for which Business Relief might be claimed.
The information contained in this article is for general information purposes only and does not constitute legal or other professional advice. Specific legal advice should be sought on any particular matter.
