Family site transfer and 'connected gifts'

T

thos

Registered User
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151
Hi,
My wife and I are looking to build a house on a site which has been gifted to us by my wife's parents. The site has been valued at €100k, she is exempt under Parent Daughter, but I'm trying to work out my CAT exposure, as it is looking like the bank will require the site to be in both names.

What looks interesting is this piece below. Can anyone confirm what revenue determine as 'adequate evidence'? Letter from bank sufficient or is there something more involved required.

"19.16 Connected Gifts
Under section 8 CATCA 2003, gifts are deemed to come from the original
disponer when they are gifted on within 3 years before or after the original
gift. However, in cases where, for example, a gift (the first gift) is taken by a
married child of the disponer and consists of a house or a site for a house and
that child in raising a mortgage on that property finds that the lending
institution as a requirement for the mortgage demands that the property is
placed in the joint names of the spouses (the second gift), then provided
adequate evidence is given that the transfer into the joint names is at the
insistence of the lender and that the first gift was not made to enable or
facilitate the making of the second gift Section 8(1) will not apply. Section
8(2) covers this situation and will also apply in all other cases where it can be
shown to the satisfaction of the Revenue that such gifts are not so connected."

Thanks,
Tom
 
I would think a straightforward letter from the Bank would suffice, can't see anything more complicated being required.
 
Bank (PTSB) don't seem to have come across it, but said they deal with joint mortgage/sole title requests on case by case basis. Trying to find the cheapest and easiest solution here!
 
Current threshold level of gift from parent to son/daughter is €225k is 2012/2013. Therefore your wife has no tax liability.

There is no gift tax between husband and wife.

Get the site in your wife's name first directly from her parents. Then check with Revenue if there is a specific length of time she must wait before putting your name on it too. There should be no tax liability for you.
 
You might be better off asking the mods to move this to the taxation section but Denise's advice seems spot on.
 
denise2007 said:
Get the site in your wife's name first directly from her parents. Then check with Revenue if there is a specific length of time she must wait before putting your name on it too. There should be no tax liability for you.
Click to expand...

From what I can see that period is 3 years, so would still need joint mortgage / sole title for that period.
 
You don't both need to be owners, you could be both on the mortgage and your wife on the title, normally bank covers this by way of a special condition in the loan offer but you have to flag this to your branch tthat this is part of your application for tax reasons.


But if that tax relief applies, then usually when you get a loan offer in joint names there is a standard clause stating that both mortgagors must be owners and that clause should suffice?

(3)
 
Still working with a few banks to get final approval, but certainly one has pushed back on that sole-title idea so far.

If joint is the norm and preferred, and I can get tax relief on it, then I'm hoping that is the path of least resistance and will keep everyone happy.

PTSB have said they will consider it, no definite answer as yet.
 
ICS, AIB & Haven Mortgages (AIB - through a broker) will do Joint Mortgage/Single Title options, but the person who is on the title will normally need to be in the stronger position to get approved.
 
If there is exemption available why do people still look sole title on the land?
 
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