# Worried about losing inherited house if I can't afford the CAT.



## Sickofit (30 Jun 2014)

I am due to inherit my family home when my mother passes, I hope this is not for a long time obviously, but with the market in Dublin as it is I'm wondering how they value the property? 
If the house is valued at for example €450,000 and the threshold €225,000 and the remainder at 33% does this mean I'd have to pay €75,000 in inheritance tax? I don't live in the house, I live with my husband, I'm worried about how I would afford this. I don't want to lose my childhood home, but I can't see my husband selling our current home to fund my childhood home. Not sure we'd even have that much money if house sold. How does this work?


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## Thirsty (30 Jun 2014)

It is possible to take out life assurance cover to pay inheritance tax, it has to  be specifically for that purpose however. I don't know if would be suitable in your case but worth looking in to.


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## Brendan Burgess (30 Jun 2014)

It sounds to me as if you can't afford to keep two homes?  So you must sell it. 

Pay off the mortgage on your current home. 

Brendan


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## itsallwrong (30 Jun 2014)

Had kind of a similar problem a good few years ago.  
Sentiment lost to financial sense.

For the sake of memories, you could be opening a can of worms for a good many years to come with tax and hassle.

Is it just you inheriting the house?

They ask for a professional auctioneer valuation at the time of the owners passing.

Ring the CAT tax man to get clarity.

Plenty of posts on inheritance on AAM


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## Joe_90 (30 Jun 2014)

What are you going to do with the €450,000 house?  If you can rent it out then you should be able to secure a mortgage to pay the tax.  If you want to live in it, €75k is not a lot to pay for a €450k house.

Of course you could investigate the CAT dwelling house exemption and pay no tax.


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## AlbacoreA (30 Jun 2014)

Also consider if you have the means to pay for upkeep in maintenance and property tax of a larger more expensive house. 

I would say many people partners would be reluctant to move into their partners family home unless they can change it to make it your own.


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## Brendan Burgess (30 Jun 2014)

> I am due to inherit my family home when my mother passes, I hope this is not for a long time



Given that it is probably a long time away, don't worry too much about it now. 

The main way to reduce CAT is to get an exemption by living there for three years before you receive the gift/inheritance.  As that is not on the cards, I don't think that there is much you can or should do.


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## Branz (9 Jul 2014)

Thirsty said:


> It is possible to take out life assurance cover to pay inheritance tax, it has to  be specifically for that purpose however. I don't know if would be suitable in your case but worth looking in to.



Its called a Section 60 policy and its a whole of life policy on your Ma.
It might be worth looking at: the cost benefit math is simple enough.
I would sell the house anyway for all the reasons mentioned.

You don't need a millstone like that unless you have the free cash flow to maintain it and the stomach for renting, being a registered landlord and all that
AFAIK if you did move in for the 3 years, I think you then have to keep it for maybe 6 years


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## paddi22 (10 Jul 2014)

As others said, it's hopefully a long way away, but circumstances can change in the meantime. I had a friend pondering the same issue years ago, in the end it turned out mother needed to be moved to full time nursing home for years, so house had to be sold to cover costs. The future rarely turns out as predicted!


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## Branz (10 Jul 2014)

Looking here
http://www.revenue.ie/en/tax/cat/guide/insurance-policies.html
the Section numbers seem to have changed from 60


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