House inherited and to be gifted

[johnflan]

Folks, would appreciate some guidance.

My cousin (aged 73) died recently and in his will left his house to his only brother as he has no other immediate family.

His brother is 81, is executor of the will, lives in the UK and has decided that he does not want the house as he doesn’t need the hassle associated with sorting all this out. Instead wants to give it to me for one euro (or free). If needs be he will pass over responsibility for me to be executor of the will.

The property is worth about 120,000. I already have a family home.

What is the best way to structure this transaction to minimise the tax liability for his brother in the first instance and then also minimise my tax liability.

Thanks in advance for any help.

 

[Joe_90]

Ah the old "Tax Planning" after the person has died.

If the living brother disclaims his inheritance in favour of you then he takes the inheritance pays the CAT and then gifts it to you and you pay CAT.

Are there any other relatives who would have a claim if he disclaims the inheritance and it went back into the estate of the deceased.

 

[johnflan]

"Are there any other relatives who would have a claim if he disclaims the inheritance and it went back into the estate of the deceased."

No there are no others relatives.

Just want to confirm what you mentioned in relation to CAT.

If the property is worth €120k then his brother would pay CAT on approx €90k (120k less 30k tax free threshold) @ 33% = €30 tax.

If his brother then gifts it to me as a cousin I will pay CAT on €105k (120k less15k tax free threshold) @33% = €35k tax.

Given his brother is elderly & does not want the hassle of dealing with all of this then I potentially will pay both tax bills - total CAT payment of €65k on a house worth €120k! ...all this for a house that is "gifted" for one euro - any thoughts on his this can be structured to reduce this amount. I have no problem paying the tax but it seems excessive.

One other question. The deceased cousin was in a nursing home under the HSE Fair Deal scheme. There is an outstanding claim on the house due to HSE of €18k as a result of this scheme - can any of this be off set against the value of the house for CAT calculation.
.

 

[Importer]

If your cousins brother (in England) disclaims the property in favour of you
then Capital Aquisition tax will need to be paid twice

If your cousins brother disclaims the property (without mentioning you) then
the property becomes part of the "residue" of the estate and in that case the property falls to the next nearest relative(s) which I understand is you.
In this case Capital Aquisitions tax is paid only once.

 

[Luternau]

.... then I potentially will pay both tax bills - total CAT payment of €65k on a house worth €120k! ...all this for a house that is "gifted" for one euro

I am fairly certain you know the amount of €1 is just a notional amount as consideration and has no relationship to the fair market value of the asset.

The HSE matter complicates this-I dont know if this can be offset. Logic would tell you it should be allowable as the inheritance is reduced by this amount. Do you have an accountant?

 

[danial3262]

Capital Acquisition tax is applicable here. Take help of a lawyer who have knowledge of Capital Acquisition tax or Inheritance Tax which is charged on taxable inheritances taken on a death.