inheritance vs gift

[gloves123]

Could someone advise me. My children and i have been living with my mother the past six years. A small profit from the sale of my own home financed improving my mothers home and the plan is for us to live there with no plans to move out. Shes told me in her will shes stated for her estate to be divided equally between three of us (myself and two other siblings) She has two investment properties worth about 300,000 and the home we live in is about 450,000 euros. Im presuming the home itself will be excluded from CGT, as im living there, but this means Ill be getting a disproportionate share of the estate. It will suit my siblings, they have their own homes and theyll also then inherit an investment property, so there wont be any contention, but will I have to pay gift tax on the disproportionate share Id inherit, and if so, would the cgt threshold apply, or would I have to pay tax on the amount above the 3,000 threshold? any advice much appreciated.

 

[mf1]

Why do you use the word disproportionate?

You make it sound as if it is your mother's function to favour you over your two other siblings.

Presumably, there is a reason why you and your children are living with you mother. This could be because she needs looking after or because she provided you with accommodation when you could no longer stay in your own home. For whatever reason.

You invested money in your mother's house. And now you say that your mother is leaving everything to the three of you. So - was that always her intention? In which case, you knew about it when you moved in.

So, was there no long term conversation about your situation when you moved in? Did you assume that because you'd be living there, that she would leave the house to you?
And what difference does it make if your siblings have their own homes? Should they be penalised and you rewarded because of that?

The tax you refer to is not CGT but CAT - capital acquisitions tax - the tax paid to Revenue when you are given a gift or receive an inheritance with a value over a certain threshold.
See this site for more info:

http://www.revenue.ie/en/tax/cat/thresholds.html

So, when your mother dies, unless she changes her will in the meantime, you will receive one third of her estate. Will this be enough for you? Can you ask to take one of the investment properties as your share and you live there?

Ultimately, for reasons you may not have gone into, you could, potentially, seek to overturn your mother's will if you believe you are entitled to a greater share than she leaves you but you should educate yourself now on a person's freedom of testation (as in, children have no automatic entitlement to ANY share of their parent's estate). Your mother could decide to leave it all to St. Vincent de Paul or the ISPCA.

mf

 

[Gordon Gekko]

Do you mean two investment properties worth €300k each or €150k each?

If your mother's home is left to you exclusively, that could be tax free with some planning.

 

[Vanilla]

Gloves, I am struggling to understand your post- do you mean that your mother is splitting her three properties between you all, so if the three properties are worth 750k, you are each getting 250k worth each, or that your mother is leaving her house in which you live to you, and one investment property to each of your siblings?

 

[john luc]

Not clear if the investment properties are 300K each or total but however this seems to me that for peace and clarity a discussion between all of you should happen so there is no grief later. Your mother could just will you the home and split the rest with your siblings. It does not have to be dead equal.