Removing him from deeds. Tax implications (not married)

Inabind

New Member
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I was with my partner for 15 years (not married) and we separated in Nov 2018. We have 3 children together. We bought a property in 2016 and both of our names are on the deeds.

I am currently living in the property with the children. He moved out in November. He has said that he will take his name off the deeds if I pay the remainder of the mortgage (approx €8500) and give him €15,000.

I saw a solicitor today and he advised that I may be liable for capital gains tax. He advised that if I pay my ex less than the value of 50% of the property, I will need to pay tax on the difference, as it will be seen as a gift to me from my ex. Is this the case?

We bought the house for approx €100,000 from my mother. We put €75,000 deposit and got a mortgage for €25,000.

Most, if not all, of the deposit was my money. I sold a property that was solely in my name and used that money together with some inheritance and redundancy money (both also mine) for the deposit. My ex is not disputing this. Would it be possible to get a reduction in the tax payable or be able to get an exception for this reason? As I don’t see that he is ‘gifting’ the property to me as it was my money that was used to purchase it originally.

I would not be able to afford the tax payment on top of buying him out of the property and I’m at a loss for what to do next.

I hope this makes sense.
 

Feemar5

Frequent Poster
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306
Why are you paying him €25,000 and taking over the mortgage when it was mostly your money that purchased the house. I can see that he had his name on the mortgage but he is also responsible for three children and providing a home for them. Have you sorted maintenance payments ? You need expert financial /taxation advice.
 

Inabind

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Hi, thanks for your response. He is paying maintenance. I agree that he should get some money to help him start again, that’s what I would hope for if things were reversed. I guess my problem is paying the taxman as I feel I shouldn’t have to but solicitor thinks I may have to as we weren’t married. Do you know if I could get any relief due to the fact that it was my money used to buy the house in the first place?
I’m going to make an appt with an accountant but I don’t want to waste my money if there’s no alternative to paying the tax as it’s not something I can raise enough money for.
 

Inabind

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Thanks Derek, the solicitor says that as I am not paying the full 50% value of the house, then I am receiving ‘a gift’ of the balance from my ex partner and it is this that I would have to pay tax on..
 

Homelandfan

Registered User
Messages
12
I saw a solicitor today and he advised that I may be liable for capital gains tax. He advised that if I pay my ex less than the value of 50% of the property, I will need to pay tax on the difference, as it will be seen as a gift to me from my ex. Is this the case?
Hi Inabind. How much CGT tax does the sols. think you owe - has he given you a breakdown - if not then I would ask for it?
Hopefully the break is fairly amicable so that is good and you both want to keep it that way.
From my read of the situation your ex-partner put little or no equity into the house and from what you say, he accepts that. Gather up your paperwork/evidence that proves this and have it to hand.

Here's another approach - can you raise EUR14,500 elsewhere?

you could offer ex-partner EUR6000 (3K now and 3k in January 2020 - gifts of EUR3000 per year have no liability to tax) if he agrees to meet you at the solicitors to settle things. Get solicitor to draw up an agreement where ex agrees to take his name off the deeds to the house in return for the 6K?
At same time contact bank to say you will be clearing the mortgage in full with the 8.5K and get their buy-in.
So you get an agreement with the ex regarding the house, the mortgage cleared, the deeds in your name only and no tax to pay.
Then just clear your debt as quickly as possible. Is this an option or am I missing something here?
 

huskerdu

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2,138
Sorry but this is legally incorrect.

Legally, they are "strangers" , and they co-own a house. If he hands over half the house to her , and doesn't sell it at market rate, its legally a gift and subject to CAT.

I don't know if you say that you have him a gift of half the deposit years ago so it cancels it out. If I were you, I would pay for expert tax advice on this, as it is worth pursuing.
 

Inabind

New Member
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8
Sorry but this is legally incorrect.

Legally, they are "strangers" , and they co-own a house. If he hands over half the house to her , and doesn't sell it at market rate, its legally a gift and subject to CAT.

I don't know if you say that you have him a gift of half the deposit years ago so it cancels it out. If I were you, I would pay for expert tax advice on this, as it is worth pursuing.
Thank you, I didn’t think to say anything about gifting him his half of the deposit, hopefully this will help when I see the accountant. I can prove that it was my money with bank statements etc so I will gather this together for the appt when I get one. Thanks again!
 

Feemar5

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306
I think what your solicitor is saying that you will be receiving a gift of 50% of the value of your house - but as you paid for most of the deposit which was substantial and you have documents to prove this you should contact a tax expert and have all your documents with you.
 

Inabind

New Member
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8
I think what your solicitor is saying that you will be receiving a gift of 50% of the value of your house - but as you paid for most of the deposit which was substantial and you have documents to prove this you should contact a tax expert and have all your documents with you.
Thanks, yes I will gather all the info and meet with an accountant to see if it helps my cause. I feel a bit more hopeful about it now
 

Abren03

Registered User
Messages
13
When house was brought 15 years ago from your mother, was the market value of house 100k Or more?

What is the value of the house now?

I am open to correction here: For previous, now separated, cohabiting couples, transfers of assets are treated the same as transfers between married persons (I.e CGT/gift tax etc tax exempt) only under a court order. If no court order, transfers treated as if persons are strangers.
 

cremeegg

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3,082
I am open to correction here: For previous, now separated, cohabiting couples, transfers of assets are treated the same as transfers between married persons (I.e CGT/gift tax etc tax exempt) only under a court order. If no court order, transfers treated as if persons are strangers.
I think this is correct and much of the above is beside the point.

Make your agreement with your ex get it made the subject of a court order. No tax implications.

Your solicitor seems a bit out of his/her depth. I think an accountant would be even worse. Any accountant can tell you the tax implications based on a given set of facts, but what the facts actually are in this case is a legal matter. Maybe a more experienced solicitor.
 

Inabind

New Member
Messages
8
I think this is correct and much of the above is beside the point.

Make your agreement with your ex get it made the subject of a court order. No tax implications.

Your solicitor seems a bit out of his/her depth. I think an accountant would be even worse. Any accountant can tell you the tax implications based on a given set of facts, but what the facts actually are in this case is a legal matter. Maybe a more experienced solicitor.
Thanks for your help..Sorry if this is a stupid question but do you know how difficult (ie expensive) it would be to get a court order?
 

Inabind

New Member
Messages
8
When house was brought 15 years ago from your mother, was the market value of house 100k Or more?

What is the value of the house now?

I am open to correction here: For previous, now separated, cohabiting couples, transfers of assets are treated the same as transfers between married persons (I.e CGT/gift tax etc tax exempt) only under a court order. If no court order, transfers treated as if persons are strangers.
Thanks for the information- is it difficult to get a court order?

We only bought the house in 2016 so house probably worth about €120,000 at a guesstimate
 
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