Joint Account with fiancee and Gift Tax

raven

Registered User
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Hi,

Myself and fiance have recently sold our home, the sale is due to be completed in January.

The house was entirely in my name but my fiance contributed to half of mortgage payments over the last couple of years, although I have paid of most of the mortgage via lump sums. There is nothing on paper indicating that she has had any ownership of the property, it is entirely based on trust (We have been cohabiting in a happy relationship for over 9 years and have a child together, with more planned).

Now, the proceeds of the sale will be circa 300K euro (we have redeemed the mortgage). We plan to rent for around 1 year and then buy when we find somewhere that is good value for us.

Therefore, the cash needs to sit on deposit for a while. So, we would like to split the funds across joint accounts in a number of financial institutions to avail of the best interest rates and importantly, to maximize the government guarantee.

Eg. Government guarantees Halifax (who have very competitive lump sum rates) up to 100K per person, so if we had a joint account it would be guaranteed up to 200K.

So, my question is, if we did the above (joint accounts), effectively putting large sums of money in my fiance's name, - is there a danger she would become liable for Gift tax? (or any other tax liability! )
Would I be better in terms of tax efficiency, keeping the cash only in accounts in my name?

Thanks for your thoughts.
 
Hi folks - sorry to bump this but I am curious as to a response.

Would any gift be 50% or the full amount due to the legal interest in joint accounts.
 
There appears to be no intention to gift funds on this transaction. Given that you will be using these funds to purchase another property it is highly unlikely that there will be any query from the Revenue. You mention your fiancé so it would appear that you intend getting married. If you use all of the funds to purchase a new property in your joint names before getting married you may be ok if the wedding progresses. Ideally you should check out the position with an accountant.
 
In practice, Revenue wouldn't look for tax in such circumstances (even if technically there could be an exposure).

To eliminate the risk completely, you could draft a simple agreement classifying any advances via the joint account mechanism as loans. Then just write off the loans once you tie the knot.
 
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