2021 in review: ‘How does Revenue view adults living rent-free in parents’ property?’ (via IrishTimesBiz)
You say the market rent for the apartment is €1,000 a month. On that basis, she would be paying €12,000 a year. If both of you own the apartment, €6,000 of that can be covered by the small gift exemption each year with the other €6,000 being marked against her €335,000 lifetime limit of gifts and inheritances from you.
Revenue can challenge the “market rent” figure so be sure of this and also be aware that it will be expected to rise annually.There was more latitude on this up to 2014 but then Revenue discovered that the Irish love of a loophole had seen a significant number of well-off families use the measures then in place to more or less fully finance the lifestyle of their adult children.
Capital gains die with an owner so any gain up to her death for any time she rented it out is immaterial. What you need to ascertain is its market value when it passed to you and your husband. That will be the base cost and subtracting that from the price achieved in any sale – €335,000 or whatever – minus allowable expenses such as legal and estate agent costs will give you the amount liable to capital gains tax at 33 per cent.
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