Gift of Investment Property from parent

How long does your friends mother own the house is it more then 10 yrs ?
and how old is your friends mother ?
 
Ants09 said:
How long does your friends mother own the house is it more then 10 yrs ?
and how old is your friends mother ?
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My friends mother is around 67 or 68. (ie, not much chance of getting a loan!). She has the house since the early '70's and it has always been rented out. It was mortgage free until about 3years ago. She then re-mortgaged by E200k to buy a couple of apartments abroad. As far as I know, there is no life cover on the loan due to her age. It is simply secured on the house in the event of death.

It's a case of trying to approach the bank in such a way so as to basically re-mortgage the existing E200k, and get approx E150k on top of that to renovate the house. Total E350k. At E350k there'd be a LTV of approx 50%. My friend then plans to live in it with her husband for life. Their combined salaries come to approx E120k. I don't think there's an issue with affordability.
 
well then your friends mother could dispose of the house to her daughter and claim retirement relief under s598 TCA97 and she doesnt have to dispose of her other investments at the same time, the amount that can be claimed is €750,000 dont know if this help you or not
 


Retirement relief does not apply to investment assets. so would not apply in this case.
 
paulpd said:
As far as I know, there is no life cover on the loan due to her age. It is simply secured on the house in the event of death.
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I think they will have to have life cover on each others lives which would be assigned to the bank for the purpose of the transaction.

They should talk to a bank
 
Ned_ie said:
Retirement relief does not apply to investment assets. so would not apply in this case.
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Chargeable Business Assets​
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Chargeable business assets are assets used for the purposes of a trade (including farming), profession, office or employment, carried on by:​
  1. ♦ The individual,
  2. ♦ The individual’s family company or
  3. ♦ A company, which is a member of a trading group of which the holding company is the individual’s family company.
Land, buildings, plant and machinery are chargeable business assets. Goodwill is a chargeable business asset. Shares and other assets held as investments are excluded. Assets, which are not chargeable assets (for example, stock, debtors or cash) would not be included in the definition. Essentially every asset is a chargeable asset except one on the disposal of which, at the time of the disposal, any gain arising would not be a chargeable gain. Thus shares held as an investment would not be a chargeable business asset but would be a chargeable asset.

so i presume since the property is held since the 70's and was rented out it be classify as a chargeable business asset !​
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Look at the very first line in your post.
Investment properties ( like shares in the example you gave) are chargeable assets but not chargeable business assets. Retirement relief cannot be claimed in such situations. There is no trade/profession being run from the property. Rental income is "unearned income" Sch D Case V.​

There is one situation where it can apply to a rental property, where a company (trading) rents the premises from its proprietory director and on retirement the director disposes of BOTH the trade and property to the one party. In that case Retirement relief may apply to the property. However that does not apply to the case in this post.​
 
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