Gift house or sell it and give cash?

A

andrew1977

Registered User
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Hello

Elderly aunt wants to give house/transfer title to nephew whilst she is still alive.

House value approx 130-160k

What would be the most tax effective way to go about this ?
Buy it from aunt or let aunt gift it to him and what would be the most tax effective way to complet this ?

Thank you
 
Re: Buy House or Gift House ?

I'm sure other posters will have a more informed view on this but I'd expect one of the key factors here would be if your Aunt will retain a right of residence in the house for the remainder of her life? This may be a key question in terms of the best approach to take?

This right of residence might reduce the value for Capital Acquisitions Tax?
 
Re: Buy House or Gift House ?

assuming she lives in it as her home when giving you the gift
There will be no CGT as it's her principal private residence.

You will have to pay Capital Acquisitioins Tax of 25% of 100 (150 - 50)

You will have to pay stamp duty, but this will be very small.

If it is not her home, then she would have to pay CGT on the disposal.
If she leaves it to you in her will, there will be no CGT or stamp duty.

If you live in it for 3 years, before she gifts it to you
You will not have to pay the Capital Acquisition Tax, subject to some conditions easy to meet.

If she gives you €150k to buy the house now
You will still have to pay CAT on the gift.
 
Yes my aunt will have right of residence in the house for the remainder of her life, i and my partner will be taking care of her .

The house needs good upgrade on it and full plannng received on it for extension to be built

Any other options to me ?

Thanks for the replies folks, i am looking for some good pointers before i start the ball rolling, its a while grey area to me.. thanks again
 
Afraid I don't know for certain and someone else may have a better view but my thinking would be that if a right of residence is formalised for your Aunt then it should reduce the purchase or 'Gift' price and therfore reduce your liabilility. I'd obviously advise you not to do any renovations/extensions until you have the house in your names (and of course your Aunt is happy with whatever arrangement you arrive at). I would also advise your Aunt to seek independent legal advice on the transaction to ensure she fully understands and is comfortable with whatever approach you take.
 
Clohass said:
Afraid I don't know for certain and someone else may have a better view but my thinking would be that if a right of residence is formalised for your Aunt then it should reduce the purchase or 'Gift' price and therfore reduce your liabilility. I'd obviously advise you not to do any renovations/extensions until you have the house in your names (and of course your Aunt is happy with whatever arrangement you arrive at). I would also advise your Aunt to seek independent legal advice on the transaction to ensure she fully understands and is comfortable with whatever approach you take.
Click to expand...

Thank you, i appreciate the advice you have given.. will have to do some good checking on this situation.
 
Sorry to drag this thread up again, but got some update and need your opinions

House has been valued at 80k, so if the aunt gifts house to nephew, the tax liabilty is 25% then of 25746 (deducting the threshold allowance of €54,254..am i right ?)
Any other taxes which could be added on to this ?

Anyone consider best options now to go ahead and any good advice to take onboard ?

Should Aunt sell the house to nephew or nephew purchase from Aunt, the aunt will have right to residence on this house untill she is deceased.

Thank you
 
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