Inheritance and implications

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Westgolf

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Hi all.

I recently inherited a three bedroom semi detached house following the death of my mother. We (Mrs Westgolf n myself) have our own residence and one investment property. The investment basically washes it's face each year as it's in an area where the recovery is slower and this is reflected in the rent attained. The recently inherited property on the other hand is within a mile of NUIG and will be very easy to let and keep filled.
My query is this. The inherited property is mortgage free and paid for therefore I will not have any interest to offset against the income. Thus I will have a significant tax bill from this one property. We are both paye employees and this income would push me into a higher tax band methinks.
Property is approx 40 years old but has been kept fresh over the years. What should I do ? Get a mortgage and upgrade it in order to have a deduction ?

Any and all suggestions welcomed.

Brendan, please move to another forum if you think more appropriate.

Thanks

Westgolf.
 
Why would you borrow in order to get a deduction?!

Income €100
Allowable interest €20
Tax €40
Net €40

Income €100
Tax €50
Net €50

Would moving the property into your wife's name keep more of the rental income at the 20% rate?
 
How much is the property worth? Seeing as it's inherited from your mother you might be entitled to its full cash value tax free. You can then invest in something other than property as you seem to be totally invested in that, it would give you a few bob to enjoy as well which more people should do. Just a thought.

I might also add that just because it's adjacent to UCG and NUIG DON'T THINK FOR ONE MINUTE YOU WON'T HAVE THINGS TO BUY FOR IT. Letting to students, especially 1st years has a habit of causing the owners to buy lots of stuff to replace damaged goods, but is tax deductable. I've found over the years that students can cause untold damage to a house if proper checks aren't in place. Believe me.
 
Last edited:
Gordon Gekko said:
Why would you borrow in order to get a deduction?!

Income €100
Allowable interest €20
Tax €40
Net €40

Income €100
Tax €50
Net €50


Would moving the property into your wife's name keep more of the rental income at the 20% rate?
Click to expand...

Both of us earn approx 28k, so no real advantage.
 
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