Best option for my son and me purchasing an Irish property?

[Winner]

I’d be very grateful for advice on the best option for purchasing a property with my son.

I’m in the process of selling my house and when I receive the proceeds from the sale, I intend to gift 335K to my son who lives in France. Our plan is for my son and I to buy a property together in Ireland costing around 450K which I would live in while he continues to live in France. My son would contribute 370K towards the purchase and my contribution would be 80K.

My query is - should my son and I be joint owners or owners in common of the Irish property we buy together?

As it’s likely I will die before my son, if we are joint owners and if he is still living in France when I die, will the ownership of the house pass to my son without any Irish tax implications? If we take the owners in common route, I assume my son will have to pay Irish tax when I bequeath him my share of the property, as it’s likely the value of my share of the house when added to the earlier gift of 335K would then probably exceed the parent-child gift limit in force at the time.

 

[mf1]

"should my son and I be joint owners or owners in common of the Irish property we buy together? "

For tax, it doesn't matter - any amount gifted/inherited to your son above the CAT threshold is taxable- whether you hold as Joint Tenants or Tenants in Common.

I'm sure there are very good reasons why you're selling a house, to gift money to your son, so that he promptly buys a property with you, with that money, and an additional 35K but it does seem excessively complicated if the intention is purely tax driven?

mf

 

[Oisin19]

Irish situate assets will always be subject to CAT. Also presumably you will be Irish tax resident so CAT will apply.

You could look into a reversionary interest structure as this or something similar might achieve what you want to do.

 

[Winner]

"should my son and I be joint owners or owners in common of the Irish property we buy together? "

For tax, it doesn't matter - any amount gifted/inherited to your son above the CAT threshold is taxable- whether you hold as Joint Tenants or Tenants in Common.

I'm sure there are very good reasons why you're selling a house, to gift money to your son, so that he promptly buys a property with you, with that money, and an additional 35K but it does seem excessively complicated if the intention is purely tax driven?

mf

Many thanks for your prompt response mf – you have answered my question.

“For tax, it doesn't matter - any amount gifted/inherited to your son above the CAT threshold is taxable- whether you hold as Joint Tenants or Tenants in Common.”

I thought that when one of two joint owners died, the whole property became the surviving joint owner’s property, without any tax to be paid by the survivor, irrespective of their relationship. Obviously, I got that one wrong!

Just for information, am I right in thinking that in the case of joint owners being husband/ wife or civil partners, there would be no tax liability?

Once again, thanks for your advice.

 

[Winner]

Irish situate assets will always be subject to CAT. Also presumably you will be Irish tax resident so CAT will apply.

You could look into a reversionary interest structure as this or something similar might achieve what you want to do.

Many thanks for your prompt response Fergal.

“Irish situate assets will always be subject to CAT. Also presumably you will be Irish tax resident so CAT will apply.”

As you see from my response to mf – I wrongly thought there was a difference between joint tenants and tenants in common when a parent/child purchased property together.