An interesting little teaser.
For complicated reasons, an elderly person wishes to sell their home, entirely, to their niece. She is a first time buyer and will live there, will borrow X from the bank, get a bona fide gift of Y from someone else and a large loan from the vendor. The vendor wishes to and will retain a right of residence in the property and the substantial loan is to be repaid on the death of the vendor into the vendors estate. So there is a control element here.
From Revenue Website:
A purchaser is defined as an individual who purchases a dwellinghouse or an interest in a dwellinghouse, where the consideration for the purchase is derived from the individual’s own means, which can be or may include consideration derived from an unconditional gift or a bona fide loan evidenced in writing.
The amendment also provides that a “gift” shall be deemed not to be unconditional and a “loan” shall be deemed not to be bona fide where the donor/lender concerned:
• is not a party to the instrument giving effect to the purchase of the dwellinghouse or the interest in the dwellinghouse and
• intends to, or does, occupy the dwellinghouse with the purchaser as a principal place of residence or
• there is an understanding that the dwellinghouse, or an interest in same, will be transferred to the donor or lender at any time following the purchase.
However, where a parent moves in to live with his or her child having given the child a gift, or having made a loan to a child, towards the purchase of the house, the child will not be precluded from claiming first time purchaser relief provided there is no understanding or agreement under which the house, or an interest in the house, can be transferred to the parent after the purchase.'
Any ideas - I'm veering towards the idea that while the proposal stacks up on paper that it may fall foul of a Revenue audit so am distinctly uneasy about running with it from the nieces point of view.
Any thoughts?
mf
For complicated reasons, an elderly person wishes to sell their home, entirely, to their niece. She is a first time buyer and will live there, will borrow X from the bank, get a bona fide gift of Y from someone else and a large loan from the vendor. The vendor wishes to and will retain a right of residence in the property and the substantial loan is to be repaid on the death of the vendor into the vendors estate. So there is a control element here.
From Revenue Website:
A purchaser is defined as an individual who purchases a dwellinghouse or an interest in a dwellinghouse, where the consideration for the purchase is derived from the individual’s own means, which can be or may include consideration derived from an unconditional gift or a bona fide loan evidenced in writing.
The amendment also provides that a “gift” shall be deemed not to be unconditional and a “loan” shall be deemed not to be bona fide where the donor/lender concerned:
• is not a party to the instrument giving effect to the purchase of the dwellinghouse or the interest in the dwellinghouse and
• intends to, or does, occupy the dwellinghouse with the purchaser as a principal place of residence or
• there is an understanding that the dwellinghouse, or an interest in same, will be transferred to the donor or lender at any time following the purchase.
However, where a parent moves in to live with his or her child having given the child a gift, or having made a loan to a child, towards the purchase of the house, the child will not be precluded from claiming first time purchaser relief provided there is no understanding or agreement under which the house, or an interest in the house, can be transferred to the parent after the purchase.'
Any ideas - I'm veering towards the idea that while the proposal stacks up on paper that it may fall foul of a Revenue audit so am distinctly uneasy about running with it from the nieces point of view.
Any thoughts?
mf