Is girlfriend liable for CAT if name on house deeds

Hi

We recently bought a house for 160k, all the cash was a very generous gift from my parents.
Both myself and girlfriend (Soon to be wife) names are on the deeds.
We plan to get a joint mortgage for about 300k soon to do a large renovation to the house.

Could revenue deem her liable for Capital Accusations Tax on the 160k gift my parents gave to me?

Thanks

Yes. In simple terms.

Your parents gave you a gift. You gave your girlfriend a gift of half a house. She owes CAT as the gift is above the threshold.

And no-one thought of this during the process?

mf

mf1 said:

Yes. In simple terms.

Your parents gave you a gift. You gave your girlfriend a gift of half a house. She owes CAT as the gift is above the threshold.

And no-one thought of this during the process?

mf

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It was considered alright.
Our solicitor suggested that her 50% "might be a loan".

If we had an agreement that 95% of the house value was mine and 5% my girlfriends, would this get around her owing CAT?

You need to get advice from a good tax accountant on how best to deal with this issue. Too serious to base any decision on advice from this forum.

You are in grey area here between tax planning and tax evasion.

The best tax plan would have been not to involve her until after you get married. Not sure if you can retrofit a tax plan on that.

You could treat it as a loan. And she would repay your parents after she gets married. But I don't know if that is tax evasion or tax avoidance.

Brendan

Brendan Burgess said:

You are in grey area here between tax planning and tax evasion.

The best tax plan would have been not to involve her until after you get married. Not sure if you can retrofit a tax plan on that.

You could treat it as a loan. And she would repay your parents after she gets married. But I don't know if that is tax evasion or tax avoidance.

Brendan

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Well if she treats it as a loan and starts repaying them immediately then it surely couldn't be tax evasion or avoidance?

Its not quite that simple. The cash gift should have been from the parents to their child. Subsequent gift from initial beneficiary of 50% of property purchased should be taxable. However I feel that there is some level of consideration in the treatment of gifts given in contemplation of marriage. An accountant will quickly establish the position for you.

You also need to take care of what your parents put on the return.
perhaps u get a loan pronto to repay that loan of 160k from your parents that they gave you in contemplation of marriage.

Re the mortgage of 300k for renovating on a house worth 160k.
1: sounds all wrong
2: bank may not do it as the house might not be valued at more than 300k after the work so your LTV could be shot from the outset.