CGT or CAT issues when inheriting from a grandparent

[2ForJoy]

Just a query regarding the sale of a grandparents estate.
Grandfather died some years ago leaving the house in his will equally to his children but with one stipulation - his son A living in the house at that time could stay there until son A death. The house would then go equally between his sons (4). In the event of their deaths house sale would go to grandchildren (8). Son A was last surviving son has passed recently house has just been sold. Is there a liability for CGT or CAT - previously told by executor that we would have no liability there but now there are mentions of it as being a real possibility

 

[Gordon Gekko]

There’s too little information there and it’s very confusing, so it’d be impossible to say.

When did each of these things happen, what was the property worth at those various times, and are there four sons or five sons, and indeed whose sons are they, the grandfather or ‘Son A’?

Rather than 2ForJoy, it’s 3ForPain trying to make sense of all that!

 

[ClubMan]

I thought that I was alone in not being able to make sense of it...

 

[2ForJoy]

Ok my apolagies.
To clarify yes San A is a son of the grandfather. Deceased in 1995. Will at that time stated the above see original post
There were 4 sons in total all now deceased too. Son A resided in house until 2022 when he too passed away. House put up for sale then now sold.

 

[2ForJoy]

There’s too little information there and it’s very confusing, so it’d be impossible to say.

When did each of these things happen, what was the property worth at those various times, and are there four sons or five sons, and indeed whose sons are they, the grandfather or ‘Son A’?

Rather than 2ForJoy, it’s 3ForPain trying to make sense of all that!

Ok apolagies 4 sons in total . Grandfather passed away in 1995 last Son son A deceased 2022 house then sold. No idea of what property was worth at those times - does that impact things

 

[_OkGo_]

Grandfather died some years ago leaving the house in his will equally to his children but with one stipulation - his son A living in the house at that time could stay there until son A death. The house would then go equally between his sons (4). In the event of their deaths house sale would go to grandchildren (8).

It sounds like it was either a terribly written will or the family/executor misunderstood what was supposed to happen.

Your grandfather could not will something into the future depending on his sons deaths. It's a complete mess and practically impossible to implement for an executor. He could only do it at the time of his death, e.g. if any son B predeceases the grandfather, then the children of son B inherit son B's quarter.

So what should have happened is as follows. In '95:
- all 4 sons receive 1/4 share in the property
- son A is given a right of residence meaning they all own it but only he can live there and it can't be sold until he does.

That should be the end of your grandfathers wishes.

What happens to each quarter share after that depends on the wills made by each son. If Son B was married and made a simple will leaving it all to his wife, then it passes to her on Son B's death.

It's very likely that the grandchildren are entitled to nothing from the grandfather's will. Anything they get now depends on the wills of each of the 4 sons

 

[2ForJoy]

It sounds like it was either a terribly written will or the family/executor misunderstood what was supposed to happen.

Your grandfather could not will something into the future depending on his sons deaths. It's a complete mess and practically impossible to implement for an executor. He could only do it at the time of his death, e.g. if any son B predeceases the grandfather, then the children of son B inherit son B's quarter.

So what should have happened is as follows. In '95:
- all 4 sons receive 1/4 share in the property
- son A is given a right of residence meaning they all own it but only he can live there and it can't be sold until he does.

That should be the end of your grandfathers wishes.

What happens to each quarter share after that depends on the wills made by each son. If Son B was married and made a simple will leaving it all to his wife, then it passes to her on Son B's death.

It's very likely that the grandchildren are entitled to nothing from the grandfather's will. Anything they get now depends on the wills of each of the 4 sons

Thankyou for your response.
Wives of each son are also deceased now.
Eight grandchildren remain..
Will was made with legal person /solicitor & went through probate at the time of grandfather's death allowing other son to remain in situ until his death - prehaps that is the 'right of residence' you refer to ? As far as I am aware none of the sons wills mentioned it as it was understood that was dealt with in grandfather's will but I am not executor and have not seen wills.

 

[_OkGo_]

Ok so remembering that this is my opinion only (not advice), I would suggest that you forget about your cousins for the moment and figure out what you own.

Assuming your father owned 1/4 of the property and he left all his estate to your mother followed by your mother leaving everything to you (and your siblings??), then you should own 1/4 of the property if you are an only child, 1/8 if you have a sibling, 1/12 if you have 2 siblings etc.

The point being that each grandchild does not own an equal portion. Some may not own anything at all depending on how complicated their parents wills were.

Son A was last surviving son has passed recently house has just been sold.

Out of curiosity, who is selling the property? One partial owner can't unilaterally sell the property

 

[DannyBoyD]

According to the OP the executor has sold the property - one assumes per the direction of the will.

Unless the home is worth millions; I suspect the share going to each grandchild will be relatively small.

OP - if probate has been granted you can get a copy of the will from the probate office, there's a small charge of around €20.

IANAL
grandparent->grandchild is group B and the threshold for that group is €32,500 (don't think it changed recently? So tax liability might not be that huge depending on what the house was sold for.

edit again to add: if all the beneficiaries are in Ireland then the executor doesn't concern themselves with payment of tax.

 

[jpd]

Without knowing what the grandfather's will actually said, it is impossible to give anything other than a guess as an answer

 

[2ForJoy]

According to the OP the executor has sold the property - one assumes per the direction of the will.

Unless the home is worth millions; I suspect the share going to each grandchild will be relatively small.

OP - if probate has been granted you can get a copy of the will from the probate office, there's a small charge of around €20.

IANAL
grandparent->grandchild is group B and the threshold for that group is €32,500 (don't think it changed recently? So tax liability might not be that huge depending on what the house was sold for.

edit again to add: if all the beneficiaries are in Ireland then the executor doesn't concern themselves with payment of tax.

 

[2ForJoy]

Ok thankyou for that response. No the house is not worth millions my understanding is that sale amount will be divided by 4, subdivided equally among siblings within each family. So after the threshold of €32K each beneficiary pays 33% tax on anything over that ?
Not on difference between value of property in 1995 and today sale price ? or both

 

[jpd]

The estate is liable for CGT on any gains made between the date of probate/valuation in 1995 and today.

The beneficiaries will be liable for CAT on their inheritence today

The CAT due may be offset by the CGT paid - but this needs to be verified by the executor

 

[T McGibney]

The estate is liable for CGT on any gains made between the date of probate/valuation in 1995 and today.

I'm not sure that's true. It's not as if the estate has sat on the asset since 1995. @2ForJoy needs to establish whether the original benefit to Son A amounted to a life interest or a right to reside, and what benefits now accrue to whom on foot of the recent death of Son A. The CAT treatment will flow from this

This may be useful

Life Interest v Right To Reside - Irish Property Owners' Association

Take care when preparing wills, it is important to be precise in drafting your intentions, life interest v right to reside

ipoa.ie

 

[2ForJoy]

I'm not sure that's true. It's not as if the estate has sat on the asset since 1995. @2ForJoy needs to establish whether the original benefit to Son A amounted to a life interest or a right to reside, and what benefits now accrue to whom on foot of the recent death of Son A. The CAT treatment will flow from this

This may be useful

Life Interest v Right To Reside - Irish Property Owners' Association

Take care when preparing wills, it is important to be precise in drafting your intentions, life interest v right to reside

ipoa.ie

I will have to check with executor regarding right to reside or a life interest - what I was told the original grandfather's will stated that the house would go equally to his 4 sons but that the son A residing at that time could remain in the house until his (Son A ) death. Upon his death house was to go equally to other sons or spouse/children if they were deceased. All sons now deceased all spouses deceased Son A was last to pass so only remaining beneficiaries are grandchildren.

 

[2ForJoy]

I'm not sure that's true. It's not as if the estate has sat on the asset since 1995. @2ForJoy needs to establish whether the original benefit to Son A amounted to a life interest or a right to reside, and what benefits now accrue to whom on foot of the recent death of Son A. The CAT treatment will flow from this

This may be useful

Life Interest v Right To Reside - Irish Property Owners' Association

Take care when preparing wills, it is important to be precise in drafting your intentions, life interest v right to reside

ipoa.ie

I will have to check with executor regarding right to reside or a life interest - what I was told the original grandfather's will stated that the house would go equally to his 4 sons but that the son A residing at that time could remain in the house until his (Son A ) death. Upon his death house was to go equally to other sons or spouse/children if they were deceased. All sons now deceased all spouses deceased Son A was last to pass so only remaining beneficiaries are grandchildren