Investment property inheritance tax

H

Higgins83

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Hi there,

My husband and I recently purchased an investment property along with my parents. Both parties have paid 50%. The intention is that in years to come we would inherit the house completely.

We are trying to figure out which names to put on the new deeds to minimise the inheritance tax we will pay in the future. We had initially planned on putting our 4 names on the documents but someone suggested it was more tax efficient to only put my father's and my husbands names on the deeds. Does this make any sense? Any suggestions welcome. Many thanks.
 
Not really.

I would have thought that having it in all four names (or one of their names and both of yours) would be most efficient.

Better to have your Group A and his Group C thresholds. But the benefit isn't huge.
 
"someone suggested it was more tax efficient to only put my father's and my husbands names on the deeds"

Who suggested this? Why did they suggest it? Have you spoken to your own solicitor about this?

There must have been some agreement, sometime, some where about what the ultimate intentions were?

mf
 
Hi there,
Thanks for the replies. Our solicitor has suggested putting it in 4 names and does not seem concerned with inheritance tax. It was an accountant that suggested putting the house in 2 names only but he couldn't really explain his reason for thinking this. All parties are happy to put it in whichever names will result in the least amount of inheritance tax in years to come. Thanks
 
Just to put Gordon Gekko's response into easier to understand language...........

If mother/father and daughter buy it, when parent(s) die, daughter can inherit ( currently) 225K before paying any inheritance tax.

If husband comes in, his threshold is lower - 15075

See these thresholds

http://www.revenue.ie/en/tax/cat/thresholds.html

I think the idea of husband and father in law buying is a misunderstanding of the relationships and who is related to who.

mf
 
That's great thanks mf1. I had thought it may have been the case that the accountant was mixing up relatives. I'll chat with my solicitor before making a final decision. Thank you.
 
Assuming that not all people will die at the same time then you will be looking at the various scenario's. Having the four names on it will give each of you the calender allowance of €3000 each to add to your one time allowance so if either of you pass away first then your asset share passing on will give they others the chance to use this extra allowance.
E.G. house is valued at €396,000 ,
1/4 each valued at €99,000 ,
one person dies and leave equal share of €33,000 to the remaining 3 then they apply the once off allowance plus the calender allowance of €3,000. If another person passes away and they leave their share to the remaining 2 then you can apply the calender allowance of €3,000 again plus any remaining once off allowance.
 
john luc said:
Assuming that not all people will die at the same time then you will be looking at the various scenario's. Having the four names on it will give each of you the calender allowance of €3000 each to add to your one time allowance so if either of you pass away first then your asset share passing on will give they others the chance to use this extra allowance.
E.G. house is valued at €396,000 ,
1/4 each valued at €99,000 ,
one person dies and leave equal share of €33,000 to the remaining 3 then they apply the once off allowance plus the calender allowance of €3,000. If another person passes away and they leave their share to the remaining 2 then you can apply the calender allowance of €3,000 again plus any remaining once off allowance.
Click to expand...

I think you are thinking of the small GIFT exemption as far as I know the donor has be alive to claim this, it does not apply to inheritances.
 
The €3,000 allowance is also inheritance
quote from Revenue
"(Various exemptions from gift and Inheritance Tax have been provided for. For example, the first €3,000 taken as a gift by a beneficiary from a disponer in any one year is exempt from tax as are gifts and inheritances taken by one spouse or civil partner from the other.)"
One more thing to consider is a Husband and Wife can leave their assets to each other without incurring Tax.
 
The €3,000 allowance is also inheritance

No.

1. the first €3,000 taken as a gift by a beneficiary from a disponer in any one year is exempt from tax. Full stop

2. as are gifts and inheritances taken by one spouse or civil partner from the other

mf
 
mf1 said:
The €3,000 allowance is also inheritance

No.

1. the first €3,000 taken as a gift by a beneficiary from a disponer in any one year is exempt from tax. Full stop

2. as are gifts and inheritances taken by one spouse or civil partner from the other

mf
Click to expand...
I stand corrected,it is a gift allowance and not an inheritance allowance.
 
While it may not be an issue as there seems to be loads mule sloshing around, the investment property will impact on the Non Con Old age pension if it arises in the parents case.
 
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