Unmarried couple - house purchase, one provides 90% of deposit - CAT liability?

Just a quick question really. I saw on another forum that if a couple buys a house together without being married then if person-A puts in 90% of the money and person-B only puts in 10% then revenue can consider you liable for gift tax?

Is that correct?

It seems crazy to me but I figured I'd get a more precise answer here.

To be specific, we are an unmarried couple, 2 kids. We're jointly named on deeds, joint mortgage of roughly 105k, house purchase was approx 210k.
I put in most of the money, so could revenue actually pursue me for gift tax even though it's our own house?

Thanks in advance.

In a similar position to you. This never occurred to me.

Where did you seek advice before proceeding with the purchases?

I'm not exactly sure of the tax impacts, but are you registered on title as joint tenants, or tenants in common?

Our solicitor never mentioned it at all and to be honest it never crossed my mind until it came up on another forum. We're jointly named on deeds, not sure about tenants in common thing.

Same as that. I've paid about 80% of what's been paid to date. About 380k

If it is something Revenue can go after then I'd imagine there are a LOT of people in the same boat as us DeeKie, who don't even realise it.

Also wouldnt it mean that if a father gifts a child money and they then use it as deposit for house with their partner then that would also be liable in the same way, if they're not married?

New-Red said:

To be specific, we are an unmarried couple, 2 kids. We're jointly named on deeds, joint mortgage of roughly 105k, house purchase was approx 210k.
I put in most of the money, so could revenue actually pursue me for gift tax even though it's our own house?

Click to expand...

Forget about tax for the moment. What have you agreed in your partnership agreement when you bought the house?

This is how I would look at this situation


You own 70% of the house, there is no gift to Green and so no CAT for her.

An alternative way of looking at it, if you want 50/50 ownership,would be:



So Green should be paying 86% of the mortgage payments. (95/110)

In practice, most people don't think about this until they split up and he wants half the house although he put very little in and she is paying most of the mortgage. Or it's in deep negative equity, and he wants what he put into the house back.

In theory, you put in 90% of the money and pay 90% of the mortgage, and say "Dear you own half the house" , I suppose Revenue could argue that you have given her a gift of 40% of the value of the house or €80k.

As I assume you have no agreement in place to do such a thing, then Revenue could not argue the point.

In any event, Revenue has no interest in such deals.

Brendan

Revenue would never pursue this kind of stuff, but if they did, "soft" loans would probably be the best way to deal with the situation.

Brendan, that is fantastic. Thank you so much. That puts my mind at rest, much appreciated!

Tax issue aside, it's worthwhile that you have a proper look at your ownership, particularly in terms of inheritance. Not the kind of thing you want to be thinking about, but you really need to have a plan for. If you aren't joint tenants, make sure that you've both made a will in favour of the other.

Re the Tax aspect, as far as I understand, just because you own a home together doesn't automatically mean you have to own it in equal share, so any tax issues would typically only arise when you sell the house / one person inherits, or the relationship breaks down. Tax isn't my area, so I'm open to correction.

From

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In general, transfers of assets between spouses or civil partners living together in a year of assessment are not treated as disposals for Capital Gains Tax purposes.