So here’s the problem. 

The client is a widow in her late 50s, and she owns her main residence and two other rental properties (each worth €300,000; each bought in the 1990s for €100,000). She does not need the rental income as she has sufficient pension income. The client is in good health and based on her family history will live to her 90s.

She wants to gift one of the rental properties to her daughter, who is a single mother with one child. The property will be the daughter’s main residence. The daughter does not own any property and has not received any previous benefits from the mother.

The CAT on the gift is 33% x (€300,000 - €297,000 - €3,000) = NIL

The CGT on the gift is 33% x (€300,000 - €100,000) = €66,000.

Solution:

Instead of giving the daughter the entire property, the mother gifts her half of the property by putting it into joint names with the daughter. 

The CAT on the gift is 33% x (€150,000 - €147,000 - €3,000) = NIL. The daughter has remaining parent child threshold of €335,000-€147,000 - €188,000. This will increase if the CAT threshold increases over time.

The CGT on the gift is 33% x (€150,000 - €50,000) = €33,000.

Saving: €33,000.

In due course, when the mother dies, the daughter takes the other half of the property. By then (hopefully) the CAT threshold will have risen.