Gintax answers Sunday Independent readers’ questions on tax.
Article published on 22 March 2020

SALE OF FRENCH HOLIDAY HOME

Q My wife and I own a property in France, which we bought privately. If we sell it now, no CGT is due in France thanks to a reducing slide in CGT, which reduces the tax due to zero if you have owned the property for as long as we have. However, I believe tax on the full capital gain will require to be paid in Ireland. We both live in Ireland and this property has been a holiday home. We have one daughter. Am I correct that we would have to pay Irish tax on the full capital gain? Could we lower the tax bill by gifting the property to our daughter? Ciaran, Co Louth

Assuming you are domiciled as well as resident in Ireland, you are correct that Irish CGT applies to the gain on the sale.

Of course, if you moved to France with a resulting change in your tax residency, then after a number of years the sale of the property should be outside the scope of Irish tax entirely.

If you wish to gift the property to your daughter, the Irish CGT paid by you can be offset against the gift tax (if any) due by her on receipt of the house. She would need to retain the property for at least two years. Clearly, French advice would need to be obtained here also.