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Gifts and inheritances

Gifts

What is a gift?

A gift for Stamp Duty purposes arises if property is transferred to you and:

  • you do not pay consideration for it
  • the amount of consideration you pay is less than the market value of the property
  • in cases other than a lease, it is transferred to you because you married the owner.

Do you pay Stamp Duty on a gift?

You pay Stamp Duty if the property:

  • is situated in Ireland
  • and
  • an instrument (written document) is executed (signed, sealed or both) to transfer it to you.

If the property is situated outside Ireland, there may still be a charge to Stamp Duty. For more information, see When is an instrument liable to Stamp Duty?. You may be able to claim an exemption or relief.

You do not pay Stamp Duty on the transfer of property from your spouses/civil partners.

Who has to pay the Stamp Duty?

All parties to the instrument, that is the giver and the recipient, are accountable persons for Stamp Duty purposes. If the Stamp Duty is not paid by the recipient, then the giver may be liable.

Gifts of land and buildings

You pay Stamp Duty on the market value of the property at the appropriate Stamp Duty rate.

  • Example 1

    Joan receives a gift of a house from her aunt. The market value of the house is €125,000. An instrument is executed to transfer the house to Joan.

    Stamp Duty is payable on €125,000. The Stamp Duty rate is the rate applicable to transfers of residential property.

  • Example 2

    Joan and Peter buy a house together for €250,000 in June 2017. An instrument is executed to transfer the house into their joint names. They pay Stamp Duty on €250,000 at the rate applicable to transfers of residential property.

    Unfortunately, their relationship breaks down. They agree that the house should be transferred entirely to Joan.

    Joan is not paying any consideration. Peter executes an instrument on 15 October 2018 to transfer his share of the house to Joan.

    The market value of the (whole) house at that time is €280,000. As Joan already owns half of the house, she is liable to pay Stamp Duty on €140,000.

    Joan and Peter may have taken out a mortgage when they bought the house. Specific rules apply if Joan assumes responsibility for paying the mortgage.

    For further information, please see Stamp Duty and Consideration.

  • Example 3

    Tom gifts his son, John, a site worth €50,000 in 2005. However, no instrument transferring the site to John is executed.

    John builds a house on the site at his own expense. The total cost of building the house was €160,000.

    In March 2019, John realises that the site was never transferred to him. An instrument is executed on 10 April 2019 to transfer the site to John.

    The market value of the site (ignoring the house that has been built on it) in April 2019 is €80,000. Stamp Duty is chargeable on €80,000 at the Stamp Duty rate applicable on 10 April 2019 to transfers of non-residential property.

    If the house had been partially built at John's expense at the time of the transfer, the result is the same. Stamp Duty is chargeable on €80,000 at the Stamp Duty rate applicable on 10 April 2019 to transfers of non-residential property.

  • Example 4

    John bought a site from James for €70,000 in 2005. No instrument transferring the site to John is executed.

    John builds a house on the site at his own expense. The total cost of building the house was €280,000.

    In November 2018, John realises that the site was never transferred to him. An instrument is executed on 16 December 2018 to transfer the site to John.

    If the site was sold at undervalue in 2005, Stamp Duty is chargeable on the market value of the site in December 2018. However, if €70,000 represented the market value of the site in 2005 Stamp Duty is chargeable on €70,000.

    In both cases, Stamp Duty is chargeable at the Stamp Duty rate applicable on 16 December 2018 to transfers of non-residential property.

  • Example 5

    Mary owns the family farm. She decides to transfer it to herself and her son as joint tenants.

    An instrument is executed. The market value of the (whole) farm is €400,000.

    Stamp Duty is chargeable on €200,000 as that is the value of the interest that Mary is transferring to her son.

Gifts of shares, stocks or marketable securities

You pay Stamp Duty on the market value of the shares, stocks or marketable securities (shares) at the appropriate Stamp Duty rate.

  • Example 6

    Jane owns 100 shares in XYZ Ltd. She gifts them to Lisa. A stock transfer form is executed. The shares are worth €5,000.

    Stamp Duty is chargeable at the Stamp Duty rate applicable to transfers of shares.

If the shares gifted to you:

  • have a market value of €1,000 or less
  • and
  • the instrument is not part of a larger transaction or series of transactions you do not pay Stamp Duty.

This exemption applies to instruments executed on or after 24 December 2008.

Leases

Where a lease is treated as a gift, you pay Stamp Duty on the notional premium.

The notional premium is the amount in money needed to ensure that you pay full market value for the lease.

  • Example 7

    XYZ Ltd leases an office building from its parent, ABC Ltd, for three years at an annual rent of €15,000. XYZ Ltd does not pay a premium. The rent for similar properties, if let on the open market on such terms (3 years, no premium), is €40,000.

    XYZ Ltd must pay Stamp Duty on the average annual rent of €15,000 ((€15,000 x 3) ÷ 3).

    XYZ Ltd must also pay Stamp Duty on a notional premium of €75,000 (€40,000 - €15,000 = €25,000 x 3).

Gifts of a policy of insurance

You pay Stamp Duty on the gross surrender value of a policy of (life and non-life) insurance at the appropriate Stamp Duty rate.

You do not pay Stamp Duty if the policy has no surrender value.

Stamp Duty chargeable on higher amount

In circumstances where property is transferred as a gift but there is a debt involved, Stamp Duty is chargeable on the higher amount.

For further information, please see Consideration.

Next: Inheritances

Published: 05 September 2024 Print this page

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