Parents signed House into eldest sons name ... now want it back

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shipibo

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I was wondering if anyone could clarify the situation below for me.


In the 1970s, The parents signed the house into their eldest sons name due to tax reasons.

The idea was to eventually sign the house back into the parents names and they could then distribute this evenly to their children.

This process is looking to start now, has anyone experience of such a situation and how it will work out?

I have heard that they can claim 30000 EUR (Gift Tax) , but everything else is taxable similar to selling house normally

Any further information would be gratefully received on best way to approach this
 
Its a bit complex...
Is the plan to sell the house, and distribute the proceeds?
Does the son live in the house?
There is CGT, CAT and stamp duty considerations.
 
Talk to a solicitor.

If there was a Trust situation, it may be possible to vest the property back in to the names of the parents. Or not.

And I echo RedOnion's comments

mf
 
see Citizens Info site:

Group A also applies to parents who take an inheritance from their child but only where the parent takes full and complete ownership of the inheritance. If a parent receives an inheritance where he or she does not have full and complete ownership of the benefit, or if a parent receives a gift, then Group B applies.

If a parent inherits from their child, and have full and complete ownership of the inheritance it is exempt from tax if, in the previous five years, the child took an inheritance or gift from either parent and it was not exempt from Capital Acquisitions Tax. In this case, no tax needs to be paid even if the inheritance from the child is over the threshold.

Current CAT thresholds (from 10 October 2018)
Group A: €320,000 Applies where the beneficiary is a child (including adopted child, step-child and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.
Group B: €32,500 Applies where the beneficiary is a brother, sister, niece, nephew or lineal ancestor or lineal descendant of the disponer.
Group C: €16,250 Applies in all other cases.

I think you need professional advice.
 
Feemar5 said:
I think you need professional advice.
Click to expand...
Well, as a minimum they need more than a copy & paste from citizens info site. This isn't a specific scenario they've covered very well in their basic summary...

(Tongue in cheek - they definitely need professional advice. Legal & Tax)
 
RedOnion said:
Its a bit complex...
Is the plan to sell the house, and distribute the proceeds?
Does the son live in the house?
There is CGT, CAT and stamp duty considerations.
Click to expand...


Thanks for the prompt reply RedOnion

It is complex .... I am mailing on behalf on one of the parents

None of the Children would have the monies to pay the others their share, so a sale would be probable.

He has a room there, and stays there on a regular basis. He has a family, and they have a family home he resides the rest of the time.
 
mf1 said:
Talk to a solicitor.

If there was a Trust situation, it may be possible to vest the property back in to the names of the parents. Or not.

And I echo RedOnion's comments

mf
Click to expand...

Thanks MF1

No trust, the home leveraged a business that was going under, and under legal advice they moved family home into sons name for nominal sum.

Business was recovered, but home deal left intact
 
Feemar5 said:
see Citizens Info site:

Group A also applies to parents who take an inheritance from their child but only where the parent takes full and complete ownership of the inheritance. If a parent receives an inheritance where he or she does not have full and complete ownership of the benefit, or if a parent receives a gift, then Group B applies.

If a parent inherits from their child, and have full and complete ownership of the inheritance it is exempt from tax if, in the previous five years, the child took an inheritance or gift from either parent and it was not exempt from Capital Acquisitions Tax. In this case, no tax needs to be paid even if the inheritance from the child is over the threshold.

Current CAT thresholds (from 10 October 2018)
Group A: €320,000 Applies where the beneficiary is a child (including adopted child, step-child and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.
Group B: €32,500 Applies where the beneficiary is a brother, sister, niece, nephew or lineal ancestor or lineal descendant of the disponer.
Group C: €16,250 Applies in all other cases.

I think you need professional advice.
Click to expand...


Feemar,

Thank you for your input, this is very interesting information you have posted.

I did not know you Parents could inherit from their Children.

I know in a will, if the Parent leaves their house to their child, if they have lived in the house for the previous three years, and intend on living in it for the next three years, the house is exempt from tax upon sale. ( years maybe incorrect, could be more)

The exemption in the tax system seems to be for five years only ( in above section) covering gifts to Children being moved back ...
 
RedOnion said:
@crumdub12
Is this the parents family home, rather than an investment property?
Click to expand...


Yes RedOnion


Its the family home they lived in since 60s , to my knowledge they have no further land or properties ... if so, they are of minimal value

After signing over, the parents lived / live there. This is reason for inaction up to now
 
This definitely needs proper legal advice.

Its not clear what the end game is ?
do the parents want the house in their name now so they can leave it to their children in their will, or do they want to sell and distribute in their lifetime ?
 
huskerdu said:
This definitely needs proper legal advice.

Its not clear what the end game is ?
do the parents want the house in their name now so they can leave it to their children in their will, or do they want to sell and distribute in their lifetime ?
Click to expand...


Apologies for any confusion


They want the house back in their name to will to their Children after their passing over .. no chance of selling before that
 
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