Hopefully someone can advise me:
Myself and my brother bought a property in late 2005. I moved out 3 years later and he rented the rooms out. No problems were had - he was getting a cheap room and the rent-a-room scheme helped us overpay on the mortgage.
Fast forward to this year and I am trying to extricate myself from the property and get myself a place on my own. We have and outstanding mortgage of €180k and a current value of €165k. The bank (BoI) are agreeable to this but have asked for a lump sum to be paid off to bring it to 80% LTV. My brother is covering this. He is also paying me a sum which is what we've overpaid on the mortgage - divided by 2.
We have engaged a solicitor but they have come up with a probable gift tax liability. This appears to be calculated based on me gifting my brother half the original mortgage amount, with a liability of around 8k. We're struggling to figure out the logic behind this.
- why have they used the original mortgage amount?
- net value of the house isn't being used. eg if you are gifted a house, but it's in negative equity, surely there's no liability? (per citizens info)
- no account has been taken of the consideration being paid to me by my brother or the fact that he has to pay a large lump sum to enable me getting off the title
Any advise is greatly appreciated, this liability will scupper the whole deal!
Myself and my brother bought a property in late 2005. I moved out 3 years later and he rented the rooms out. No problems were had - he was getting a cheap room and the rent-a-room scheme helped us overpay on the mortgage.
Fast forward to this year and I am trying to extricate myself from the property and get myself a place on my own. We have and outstanding mortgage of €180k and a current value of €165k. The bank (BoI) are agreeable to this but have asked for a lump sum to be paid off to bring it to 80% LTV. My brother is covering this. He is also paying me a sum which is what we've overpaid on the mortgage - divided by 2.
We have engaged a solicitor but they have come up with a probable gift tax liability. This appears to be calculated based on me gifting my brother half the original mortgage amount, with a liability of around 8k. We're struggling to figure out the logic behind this.
- why have they used the original mortgage amount?
- net value of the house isn't being used. eg if you are gifted a house, but it's in negative equity, surely there's no liability? (per citizens info)
- no account has been taken of the consideration being paid to me by my brother or the fact that he has to pay a large lump sum to enable me getting off the title
Any advise is greatly appreciated, this liability will scupper the whole deal!