Ballygriffen
Registered User
- Messages
- 8
If my parents were to gift me their house now (their only asset) would it be beneficial for them and myself when paying for nursing home costs in the future >5 years from now under the Fair Deal. I am an only child. I know I would be liable of gift tax (House Value - 335K * 33%) but this would most likely be less than 22.5% of house value in the future ( Nursing home costed capped at 7.5 of assets * 3 yrs). Their only income is the state pension and they only have a small savings pot.
If the property is gifted they cant be "thrown out". The law requires that they are legally entitled to remain in house till they pass.How much is the house worth?
What age are they?
They would be crazy to do so.
Rules might change. You fall out with them. You get married , you die, your widow kicks them out.
You end up with a Capital Gains Tax bill on an asset that was accumulating free of CGT.
All to avoid paying what they should be paying anyway.
Brendan
This is not correct (or at least only partially correct). Just because you gift a house doesn't give you any right to reside or protection against being thrown out later if the gift is outright and unconditional.If the property is gifted they cant be "thrown out". The law requires that they are legally entitled to remain in house till they pass.
This was introduced to ensure people were not "thrown out" at which point the state had to house them.
As far as I know there is no cgt liability in these circumstances. As this type of situation is excluded from cgt. (I don't have a link for this but vaguely remember reading it lately). Search for dependent relative on Revenue.
If the property is retained after both parents have passed and there is an increase in value between date of death and date of sale then there is a cgt liability.
The initial post related to how the OP's parents house would be impacted upon if they need to avail of the Fair Deal scheme. if the child inherits the family home while the parents are still alive the parents have a right to remain in the family home with a right of residency.This is not correct (or at least only partially correct). Just because you gift a house doesn't give you any right to reside or protection against being thrown out later if the gift is outright and unconditional.
That said, your parents would need to be independently legally advised in relation to this and there is no way any competent solicitor would advise them to make such an outright and unconditional gift unless they had so much money/other property that the gift could not negatively impact them in future (but I note this is the situation the OP is asking about).
What is much more likely in a normal situation is that the parents could make a gift with reservation of either a life interest or a right of residence in the property. This would be formally agreed and documented and registered against the property so that it would be available for all to see. It would make the property unmortgageable (is that a word?)
Sorry for going off on a tangent but important to get this right
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?