Advice on whether to pay CGT now, or wait for possible Inheritance Tax

M

mrsdoyle1201

Guest
hi all,
i hope i am posting this on the correct board - please advise if i am not? !

I purchased a house from my parents in 2003 (at which time the house deeds were under both my mum and dad's names). On purchasing the house we decided to leave their names on the house, so that currently there are three names on the house deeds (as well as on the mortgage). On completing this transaction they were liable for CGT on 1/3 value of the house back in 2003.
a year or so ago, i looked into having their names removed from the mortgage but was told i couldnt while their names were still on the house deeds. As this was the height of the boom times the value of the house had increased significantly and would have been costly in terms of CGT to remove their names, so i left the situation as was.
As house prices have now gone down again to almost 2003 levels, i am wondering whether it is worth re-visting this to see what CGT we would be liable for at this stage?
Or am i better off leaving the house in three names, and perhaps being subjected to inheritance tax on my parents death (as they plan to will me the house)?
i guess there are benefits to having the house in their names should i get married and subsequently divorce (i am currently unmarried and have no plans to marry in the near future), as they would retain their part of the house,

i would be really interested to hear what views people have on this, and whether anyone is in a similar situation ?

thanks,
 
Tell us what the house was valued at when you bought it and how much you paid for it. At the time you bought it, did your parents live in it or up to one year before that. If not, when did they acquire it, if bought, how much, the year, if inherited/gifted, the value and the year.

Then tell us did they contribute to the mortgage. Do they now live in it. Do you? How much is it now valued at, how much is the mortgage. Have you made substantial improvements to it.
 
thanks Vanilla for your response,
the house was valued at euro 295,000 when i bought it (this may have been an undervaluation). i paid euro 220,000 for it. my parents never lived in the house. they bought it in 1998 for irish punts £164,000 (incl furnishings and legal). they paid the mortgage until 2003, whereby i started paying the full mortgage. i now live in the house, and have done since 2003. i estimate the value is now ~euro 350-400,000, with a mortgage of 185,000 euros owing. i have not made substantial improvements since i bought the house - i painted it and bought some furniture.
 
You say you bought it in 2003, but in reality it seems that the house was transfered from the joint names of your parents into your three names. Then you say you bought it for 220000 but what really happened? Did you get a new mortgage in 2003 in your three names for this amount, pay off the old mortgage and the rest went to your parents? It's quite difficult to make out what really happened.

Either you bought it outright in 2003, and your parents names were merely there to facilitate you taking out a mortgage and they never really were intended to have an interest in the property, or else only one third was transferred to you back then, in consideration of which you have been paying a mortgage etc etc.

There are different tax considerations depending on which of these is the most likely scenario.

You need to clarify this.
 
Hi Vanilla, thanks again for the reply.
yes the house was transfered in 2003 from two to three names on both the mortagage and house deeds. i got a new mortgage (3 names) and there was part of an old mortgage (also in three names post 2003).
my parents still have an interest in the property, as both their names are on the deeds of the house.
 
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