Are you aware of the gift tax element? Your partners mother is a 'stranger' to you in the eyes of Revenue, so you'll be subject to gift tax (there is potential to get a credit for the CGT paid against the CAT element).she is aware of CGT implications for herself and that they will be on the 400k value
Yes I am aware of this and will likely chat to an accountant about it soon. We are getting married this year but my understanding is this will make no difference to the CAT element if the house is sold to us pre or post marriage as the gift will be deemed from MIL to me rather than Wife to me and so will be category C regardless.Are you aware of the gift tax element? Your partners mother is a 'stranger' to you in the eyes of Revenue, so you'll be subject to gift tax (there is potential to get a credit for the CGT paid against the CAT element).
Unfortunately, we can't get much more of a mortgage than 265k at present so this is out of reach for us (currently a single income household).It might be 'cleaner' all around if you could buy the house at full market value, and then your partners mother gives them alone a gift of 100k. No tax implications for you.
I just don't understand how UB can say the value of the property is 300k for LTV but their valuer will say its 400k. The house next door was sold 2-3 years ago in the same condition so it should be a reasonably accurate valuation.I'm not sure what UB's policy is on this, but some banks don't really like purchases below market value, especially if it's not a house that there is an easily supported valuation for. They've all been caught out in the past particularly with 'one-off' houses which really weren't worth what the valuer said it was.
The plan is to fix for two years then do a few cashback switches and ultimately end up with avant. In addition, I could see us moving to a larger home in 3-4 years when we will likely be a dual income rather than single income couple and would like to avoid fixed mortgage break fees at this time.Out of interest, why are you going for the 2 year rate rather than the 5 year high value at 2.2% (LTV doesn't matter)?
Yes, the 100k doesn't have to be a cash gift, and yours is a neat solution to the CAT.But do it a different way; transact at €400k with the consideration being €300k plus a €100k promissory note.
Just note, you're assuming here that cashback will still exist in 2 years.The plan is to fix for two years then do a few cashback switches and ultimately end up with avant.
That's an excellent suggestion thanks Gekko. Would I approach an accountant about getting that set up appropriately?That’s nonsense.
The value for LTV purposes is €400k, not €300k.
€400k is the value for CGT purposes, stamp duty purposes, and CAT purposes.
But do it a different way; transact at €400k with the consideration being €300k plus a €100k promissory note. Then your mother-in-law can write-off €6k a year of the balance on the loan note, thus potentially preserving everyone’s CAT thresholds.
In that case, there really shouldn't be an issue.I just don't understand how UB can say the value of the property is 300k for LTV but their valuer will say its 400k. The house next door was sold 2-3 years ago in the same condition so it should be a reasonably accurate valuation.
We're dealing directly with UB manager.Are you dealing with a broker, or directly with a mortgage advisor? Sounds like you need to talk to someone with common sense.
If you have the cash, this makes perfect sense.However, if we use most of our savings for the house purchase and then my partner gets a cash gift from her mother directly into her account this will hopefully avoid any CAT issues.
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