Yes, once the existing €200k mortgage is satisfied, the owner will be assessed for CGT liability on disposal. The recipients (daughter and husband) may also be liable to CAT (gift / inheritence tax) on receipt of the house, based on the €650k figure...1. I presume there would be a substantial CGT liability for my friends mother on the transfer?...
No - how can a bank extend a mortgage on a property to someone who doesn't own it?... 2. ... Is there any way that by NOT doing the transfer (and therefore avoiding her mothers CGT bill) that a bank would lend these funds to my friend and use the property as collateral, eventhough her mother would remain on the deeds?...
But what about the €200k mortgage?Why doesn't the friends mother simply gift the property to the daughter, ...
Why doesn't the friends mother simply gift the property to the daughter, using the allowance amount from parent to child of approx €450k. the additional value would then be treated for CAT. Any further inheritance from a parent would be fully taxable at the CAT rate.
1. If the house is valued at 650k then this is the deemed consideration (not 450k). It doesn't matter if there is a mortgage on the house or not. As the house is a rental property and not a PPR then CGT would be payable.
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Surely if the mortgage is taken over with the house or the daughter pays it off, this would be an allowable deduction for CGT & CAT purposes and the 450k is a relevant figure?
What reasoning / precedent are you using as the basis for this argument?... Surely if the mortgage is taken over with the house or the daughter pays it off, this would be an allowable deduction for CGT & CAT purposes and the 450k is a relevant figure?
and on the CAT.... I'm wrong on the CGT...
1 - CAT gift tax on the transfer of the property - the daughter could move in to the house and live there for a period of 3 years. After that period the house could be transferred to the daughter free of tax (under current rules) and so long as the daughter has no other property in her name or beneficailly entitled to same
2 - CGT for mum - could wait until death to have the house actually transferred to the daughter - thereby avoiding any CGT and indeed Stamp Duty (not mentioned as yet).
3- Loan - herein lies the biggest problem. You mention the property is worth 650 with 200 owing at moment. Why not see if mum can borrow the extra 150 with daughter and hubby going as gaurantors on that loan? would that work? i think it might - the problem is - does any bank have
150 to give!!!!
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