CAT post separation

rjjd

Registered User
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Hi

Would appreciate if you could offer any advice on this.

John and Mary jointly purchased a house in 2002 for €240k where they lived with their two children. They took out a 2nd mortgage for €70k in 2008 to add an extension.

They separated in 2012. John moved out and has paid maintenance since - this was not subject to a formal agreement. Mary remained in the house with their children.

Mary is now taking responsibility for the entirety of the outstanding mortgage and John’s name is being removed from the deeds. They have agreed that John can reduce the maintenance payment and he has agreed to waive any entitlement to equity. The house is worth €240k and the outstanding mortgage is €200k.

John’s solicitor is insisting on a cohabitation agreement that outlines the reduced maintenance to be paid once the house has been transferred into Mary’s name - Mary’s mortgage providers are insisting on a formal letter which states he has no further interest in the property.

Mary’s solicitor is now saying that she is concerned that Mary will have a capital acquisitions tax liability and it will be assessed that the transfer to Mary of half the property for nil consideration will be viewed as a gift.

is this something Revenue would be interested in? What’s the best way to try and resolve it?

Thanks as always


Rjjd
 
@Mods - hope it is ok to give this a bump. Not sure if the title is too vague, but I missed the 48 hr deadline to edit.


Richard
 
Are John and Mary married to each other?

A gift from one spouse to the other is exempt from CAT.
 
Sorry - I should have mentioned: John and Mary never married.
In that case, CAT is definitely a concern if the transfer is not being effected pursuant to a Court order.

Mary should heed the advice of her solicitor.
 
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