Is a temporary loan considered a gift?

[InvisibleKid]

Hi.

First post here, with a slightly unusual situation. Hoping somebody might be able to help. Thanks in advance, and apologies if it has been addressed before (I did look).

The background is that my mother-in-law (a non-eu citizen, resident abroad) wishes to purchase a property here in Ireland which she can use to visit family (us) here, and possibly to retire here at a later stage.

She has the cash to complete the purchase, and we/she have identified a property she hopes to purchase.

It seems that there is approximately a five week wait for her to get an Irish PPS number (which is apparently required to complete the purchase). We may miss out on the property if we have to wait this time to get the cash.

So we are considering the following:
1) My mother-in-law will transfer the cash to my wife via bank transfer.
2) My wife will complete the purchase of the property in her own name.
3) When my mother-in-law gets her PPS number, my wife will transfer the property ownership to her mother.

So my questions in this thread are:

1) Is it considered a gift if my mother-in-law gives cash to my wife in October (say), and then my wife gives her a house worth that exact amount in December (say)?
Neither of them are any better/worse off, so surely there is no gift?

2) Are there any charges (bank or tax) for transferring large sums of money (already in Euro) from outside the EU into Ireland?

Any help appreciated.

Thanks!

 

[Branz]

U will pay stamp duty snd other costs on the sale to ur MIL.
Why not get it bought in trust for ur MIL.

Transfers. ?. Cant help

 

[InvisibleKid]

Thanks for the prompt response ircoha.

I'll look into buying in trust. I don't know what's involved in that. I need to find out.

If we're not "selling" to my mother-in-law (which we're not!... No money will be exchanged for this transfer, and stamp-duty is 1% of SALE price, correct?), then would we really have to pay stamp duty twice?

The only change of asset here is from the current property owner to my mother-in-law, and a lump sum of cash from my mother-in-law to the current owner. My wife is just an intermediary, so from an outside point of view, I would see there being no gift tax, and just one liability for stamp duty.

 

[Branz]

I agree with your thinking but the law is the law and you dont want any wrinkles.
There are much more knowegalable folk here who may see this thread.
The other, off the top of head, idea is to ask the Revenue for prior approval.
However, head, ,parapet, etc occur

 

[PaddyBloggit]

Hi.

It seems that there is approximately a five week wait for her to get an Irish PPS number (which is apparently required to complete the purchase). !

I think you are over complicating things here. Five weeks is nothing in terms of completing a sale of a house.

The best person to advise your mother in law is her solicitor. He/she will do searches, coordinate surveys etc. giving your mother in law ample time to sort a PPS number.

 

[Joe_90]

I'd agree with Paddy.

Very slim chance of signing contracts and closing in 5 weeks from a fresh start.

 

[mf1]

Agree with above posters. It can be done very simply.

Purchaser transfers funds to solicitor. Solicitor completes contracts for and on behalf of purchaser. And is in funds so there is no fear of purchaser doing a runner and leaving solicitor in the lurch.

Purchaser gets PPS number. Sale can be completed before that - the PPS number is required for stamping the Deed and that can be done up to 44 days after the sale is completed - i.e. funds are handed over in exchange for vacant possession and deeds.

Registration of the Deed cannot occur until the stamping is completed. I have seen cases where cash purchasers do not pay their stamp duty in the misguided belief that no one will ever find out. It then becomes a huge issue when they are trying to sell on.

mf

 

[InvisibleKid]

Thanks for all of the replies and advice guys. Much appreciated.

Regarding the five week wait... I was half expecting there to be further delays due to bureaucracy/red tape seeing as some of the necessary documentation is written in Russian (cyrillic alphabet). So maybe I'm being overly pessimistic there.

Also, the solicitor didn't make it clear to us, at what point the PPS number is required. Thanks for adding some missing information there. It looks like we can proceed with the potential purchase, and only worry about the PPS number at the very end.

My only outstanding question is that of whether we should expect any complications, delays or bank charges for receiving a large sum of money from an international account. Does anybody here know?

The solicitor already pointed out that the transfer of final payment to the solicitor will have to be done from an Irish bank account, and as my mother-in-law does not have an Irish bank account yet, we will most likely still do the transfer through my wife's account.

 

[Bronte]

My only outstanding question is that of whether we should expect any complications, delays or bank charges for receiving a large sum of money from an international account.
.

Why should there be a delay, bank transfers nowadays are very quick. As long as it's not money laundering there should be no issue.

There will be bank charges for the transfer, your MIL just asks her bank how much, and there is the current costs as well, and the Irish bank might have a receiving charge.