Best option for sister leaving house in her will

Hilda2021

Registered User
Messages
22
My sister has very kindly advised me she plans to make a will with the intention of her leaving her PPR to my children. She has never married and is living alone. She is trying to make it as tax efficient as possible for them.

We are trying to work out the most efficient way to do this, she has suggested that she could leave it to me, I could sell and split the proceeds between them. I'm struggling to understand the Revenue sites for CAT & CGT. My current PPR is to be left equally to them too when I pass, ex husband has signed off his rights under the succession act as have I to his.

We are trying to work out which makes more financial sense so would appreciate any guidance, properties worth approx 300k each if that is relevant. Thanks in advance.
 

Brendan Burgess

Founder
Messages
47,722
It's better for her to leave it directly to your children.

If she leaves it to you first, you are in Group B and get €32,500 exempt from CAT, and then you pay 33% on the balance.

(If you then gift the proceeds to your children, they would get up to €335k free of CAT)

If she leaves it to say, 3 nephews and nieces, each gets €32,500 exempt from CAT, so that would be an extra €65,000 free of CAT. And they would not be using up their allowances in Group A from you.

It might work out differently if your children have already received Group B gifts or inheritances, or are likely to do so in the future.

Brendan
 

Brendan Burgess

Founder
Messages
47,722
It's not a good idea to leave a house to a group of people. Even if they get on very well, they will probably fall out over the house. Mary feels that she is entitled to continue living in it, as she lived in it for the last 5 years, minding her aunt, and her aunt told her she would leave it to her.

So the will should specify that the house be sold and the remainder of the estate be split equally among the beneficiaries.

If Mary then wants to buy the house from the Executor, she can do so.

If Auntie is leaving other assets, she could specify that Mary gets the house but that she pays John and Ann €100k each.

Brendan
 

noproblem

Registered User
Messages
3,130
What age is your sister and indeed yourself? Maybe in future times the kids lifestyles/jobs might mean one or more of them wanting to live, at, or near home. In those circumstances the needs of some of the beneficiaries will have changed and the house could be better used to the benefit of everyone involved. Also, inheritance tax will more than likely change in the upcoming budget.
 

Hilda2021

Registered User
Messages
22
Thank you for the replies, there are 3 children, both myself and sister in our early 50's. All children in their late teens, early 20's. There is no other substantial money involved as far as I'm aware, she has had some health issues so that is her reason for getting things in order, her hope is that it allows them to either live in or share the proceeds of the sale to help them get on the property ladder or reduce their mortgage in the future, she does not intend to include any other beneficiaries ie siblings or other nieces/ nephews in her will as she sees them as having a comfortable living/ future prospects by way of other inheritances.
 
Top