Grandparents leaving house to grandson

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Páid

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My parents wish to leave their house to my son who is an infant. I don't know the current value of the house but I suspect it is somewhere in the region of €150,000 to €200,000.

What is the most tax efficient way to do this?
 
I see that as hugely complicated, at lot would depend on their age, if the are still young, why not wait until later in their life to do this. It could be willed to you should anything happen to them with the understanding you would pass it along when he comes of age.

In the meantime, Son is an infant, will be approx 20 years before he has any control over the use of this property. Renting, property tax etc.. What if it needs to be sold within this time frame, due to new legislation, other unforeseen circumstances within the next 20 years etc.
 
They are in their seventies and intend to live there until they die. I was thinking they should leave it to me and I would then pass it on to my son after a short time (a few months).
 
Would they be willing to will to you?
What would you do with the house should your parents pass?
Could you be causing problems for your son?
Policy and taxation will change and change again before your son may see any benefit.

A lovely gesture from your parents but be careful something good does not end up causing problems.
 
They are willing to will it to me on the understanding that I pass it on to my son. I have no problem doing that but the best way to do it is the question. I am married and have two step children along with an infant son. My wife and I have assets we wish to leave to the children but my parents house is separate to that.
 
Think you might be making this more complicated than it needs to be.

Yr parents leave asset to you.

You can choose to sell asset & invest proceeds, or keep it & rent it out if thats an option.

You & yr wife write wills leaving said asset to yr son & xyz asset to her children.
 
Páid said:
They are willing to will it to me on the understanding that I pass it on to my son. I have no problem doing that but the best way to do it is the question. I am married and have two step children along with an infant son. My wife and I have assets we wish to leave to the children but my parents house is separate to that.
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I see what is going on here. They wish to ensure that 'their' grandson inherits. And that it doesn't go into the general pot of your inheritence to all children.

I'm sure a solicitor can advise on the best way to do this. Also, they need to stop thinking in terms of 'the house'. They surely want him to get the value of the house rather than inherit the actual house?
 
You absolutely need to consult a good solicitor on this: the intent is clear enough as you say (leave a house to an individual). Doing anything else could end up frustrating rather than facilitating the intent, as all sorts of potential consequences come into play.
 
Apart from the taxation implications there are the basic complications in having to be responsible for the house until your son is old enough to take responsibility.
Who will maintain and insure the house? Will it lie empty or be occupied? Will it be rented out and if so who gets the rent? Who will pay tax on the rental income? Why should you take this responsibility on board?
Looking at the awkward situations regularly posted on this website regarding wiils and inheritances I would recommend telling your parents to get expert legal and taxation advice and not to rely on this site to give you a solution.
 
Thanks for all the replies.

My parents will be living in the house until they pass away.

If I'm not mistaken this is applicable - http://www.revenue.ie/en/tax/cat/thresholds.html

They could will me the house and providing that the value doesn't reach the €310,000 threshold I wouldn't have to pay CAT. I could then gift/will it to my son at a later date. If they were to will it to their grandson directly the threshold is €32,500 and I know he doesn't have the money to pay the 33% CAT on that.

Solicitor is already engaged by them, I just want to be sure all eventualities are covered and that a mistake is not made at this stage that will have consequences later.
 
Páid said:
I just want to be sure all eventualities are covered and that a mistake is not made at this stage that will have consequences later.
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Good.

Why do they want him to have the 'house' is this a long owned family farm house type thing? It's just I don't see the sense of tying an infant child with no means to a house, forever. Far better to sell it and the money to be put away.
Is it a wish to make sure their grandchild will always have a 'home'? What is the thinking going into this?
 
DCD said:
A lovely gesture from your parents but be careful something good does not end up causing problems.
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Yes. I agree. Not just financial. What about the two step grandchildren and the relationship between their mother and grandparents.
I think willing the house to you and then you passing it on might be the best route.
 
Páid said:
They are willing to will it to me on the understanding that I pass it on to my son.SNIP SNIP.
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It is a while since I have seen this idea. I think that this may be the act of creating a tail. I don't know if you can create tails any more in the sense of imposing on a beneficiary an obligation as to how they must deal with or dispose of the inherited asset where you are referring to the title of property such as a house.
 
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