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Valuation date and the value of benefits

  1. Overview
  2. What is the valuation date?
  3. Taxable value of a gift or inheritance
  4. Limited interest
  5. Factors used for calculating the value of limited interest
  6. Rights of residence
  7. Annuities and other periodic payments
  8. Free use of property and interest free loans

Free use of property and interest free loans

Free use of property

If you have free use of a property, or for less than its market value, this is a benefit and you may have to pay tax on it. If you use the property over a number of years, the benefit is regarded as being received on 31 December each year.

  • Example 1

    Anne gives her cousin Colette the use of her house. The annual rent Anne could receive for the property is €15,000. Colette pays Anne €5,000 per year.

    Colette is deemed to have received a gift of €10,000 on 31 December each year that she has the use of the house. Each gift is taken into account for aggregation purposes.

Interest free loan

If you receive an interest free loan, this is a benefit and you may have to pay tax on it. The value of the benefit is the rate of return the funds would generate if they were invested on deposit. The relevant tax date for this benefit is 31 December each year until the loan is paid off.

If the loan is repaid during the year, the date of repayment is used to calculate the value of the gift for that year.

You may have to file a return for this benefit. For further information, please see Filing obligations for certain interest free loans.

  • Example 2

    Joe gives an interest free loan of €300,000 to his nephew John on 1 January. The highest rate of return he could receive from an investment on deposit is 1.5%.

    Calculate taxable value

    Loan value

    €300,000

    Multiply by highest rate of return

    1.5%

    Taxable value

    €4,500

    This is regarded as a gift of €4,500 to John. The relevant tax date is 31 December each year, until the loan is paid off. Each gift is taken into account for aggregation purposes.

    If John was to repay the loan at the end of October, this date of repayment is used to calculate the value of the gift for that year.

    Calculate value for year loan repaid at the end of October
    DetailAmount
    Taxable value for full year €4,500

    Taxable value for year repaid

    (Divide by 12 multiply by 10)

    		 €3,750

Published: 01 January 2024 Print this page

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