Sell my Irish house & invest profit in someone elses name- how'd I be taxed?

[horstnminsk]

Hi,
We bought a house as first time buyers.

What we want to do is,sell the house and reinvest the money so it isn't in our name. As were rerturning to college next year, we'd be better with benefits if we didnt have that house.

How would we be taxed if the profit was used to purchase an overseas property in someone elses name?

 

[ubiquitous]

What we want to do is,sell the house and reinvest the money so it isn't in our name. As were rerturning to college next year, we'd be better with benefits if we didnt have that house.

I hope that you're not looking for a strategy to falsely claim social welfare benefits? If so, you won't get much assistance here...

 

[z108]

Ill take the money off your hands, no questions asked

 

[ClubMan]

Hi,
We bought a house as first time buyers.

What we want to do is,sell the house and reinvest the money so it isn't in our name. As were rerturning to college next year, we'd be better with benefits if we didnt have that house.

How would we be taxed if the profit was used to purchase an overseas property in someone elses name?

If you are selling a property that was always your Principal Private Residence and never rented out etc. then any capital gain is exempt from CGT.

If you gift this money to somebody else then the recipient may be liable for Capital Acquisitions Tax/Gift Tax.

I don't understand the bit about investing the money so that it's not in your name and would echo the concerns/suspicions voiced by ubiquitous above.

 

[RainyDay]

What makes you think people round here will help you to defraud our social welfare system?

Apart from the moral and legal issues, to give a substantial some of money like this to any other person (friend, relative) with the expectation of getting it back is sheer stupidity. The other party may well do a runner with your money, and you will have no come back. Remember, just one spilt drink on a night out, or one family row is all it takes to ensure you never see your money again.

 

[horstnminsk]

I probably need to clarify my situation.

We simply wouldn't be able to afford the mortage and because we were first time buyers (and didn't have to pay stamp duty) we couldn't rent it for another 4years.

Even the rent a room scheme wouldn't help much towards it.

The house is pretty old and will need a good bit of work over the next few years, eg. the oven is dying, bath leaks etc

Our courses are both degrees so I cant see how we can keep the house going for 3 years.

Also we hope to move abroad after qualifying so we would have to sell up eventually anyway.

Does anyone have any ideas what to do in a situation like this. We'd only have about 80k capital.

 

[bacchus]

Fair enough.. but i am still missing the point as to why you want your name(s) disassociated from the money re-invested if it is not for doing something let's say dodgy?

 

[ClubMan]

We'd only have about 80k capital.

The sale price less the outstanding mortgage would be yours free of any tax. Obviously you would also need to allow for selling (e.g. legal and estate agent) costs. However I too don't really understand the rationale behind disassociating yourself from this money other than perhaps in an illegal attempt to shield it from SW in order to claim benefits to which you would not otherwise be entitled (e.g. due to means test).

This thread may be tangentially of interest:

give away assets for non contributory pension

 

[horstnminsk]

100% honestly- I was told that the capital would count as income in a means test, yes. I was also told we'd lose half of it in capital gains tax. So we'd lose lots of money, even the smallest bit of help with returning to studying and not have enough to support 2 people for 3 years.

The reason I'm asking these questions is to have my facts straight and make an informed and ethical choice on the matter.

If we wanted to do something dodgy, I could simply rent out the house, cash in hand and have ducked stamp duty. Problem solved but we don't want to fraud the state. Though as anyone would, we want to prrotect or future by boxing clever but legally.

Any helpful and legal advice is appericated.

 

[ClubMan]

100% honestly- I was told that the capital would count as income in a means test, yes.

A means test will most likely take savings into account - including any lump sum capital gain from such as sale. But (at least for some means tests) the first €20K is disregarded and only the excess affects payments. For a married couple I believe that this means that they can have €40K in savings before means tested payments are affected (once again the means test may be different for different payments - I am basing this solely on my superficial knowledge of the non contributory pension means test). The SW website should have details of the means tests applicable to all non PRSI linked means tested allowances.

I was also told we'd lose half of it in capital gains tax.

Who told you this? It is totally wrong if you are talking about a capital gain from the sale of your PPR. In that case any capital gain is tax free.

If we wanted to do something dodgy, I could simply rent out the house, cash in hand and have ducked stamp duty. Problem solved but we don't want to fraud the state. Though as anyone would, we want to prrotect or future by boxing clever but legally.

Your initial suggestion about seemingly hiding the money by ostensibly putting it somebody else's name and/or investing it abroad still sounds dodgy and makes no sense other than, say, in the context of SW fraud.

You should maybe get independent, professional advice.

 

[horstnminsk]

Thanks for your help. I appericate how dodgy that sounded but I was simply asking a question, it isn't something an angle I'll persue based on the points you've highlighted

 

[RainyDay]

If we wanted to do something dodgy, I could simply rent out the house, cash in hand and have ducked stamp duty. Problem solved

Or to be more accurate, problem solved right up until the day you get into a dispute with your tenant and they decide to report you to Revenue.

 

[horstnminsk]

Or to be more accurate, problem solved right up until the day you get into a dispute with your tenant and they decide to report you to Revenue.

Er, stating the obvious aren't you? Also somewhat irrelevant as I've pointed quite clearly it's not what we'd do. Surely the point of a website like this is to help people make ethical and well informed choices?

I've been very straight about my thoughts. I've thanked those helpful members for their constructive advice and taken it on board.


Isn't a little tiring being poised over your keyboard, waiting to post pointless,negative little comments? Relax, mate. Maybe get a hobby

 

[ClubMan]

Stating the seemingly obvious has been necessary in the past because not everybody has the cop on to realise that such strategies are illegal and objectionable (to most people). No offence but based on your original post it's not surprising that some people jumped to the conclusion that you might be attempting to engage in dodgy/illegal practices such as tax evasion or welfare fraud.

 

[horstnminsk]

I completey understand what your saying. I have acknowledge the conatations of my question and clarified the matter hours ago.

You were helpful, courteous but direct about the dodgy implacations of my query. Much appericated.

However, I do think that angry, unnessasary little remarks after the fact are best suited to Avril Lavgine Fanclub forums not one for serious, intelligent discussion.

Mind you, given the rather dull subject matter, Rainman's random little outburst are rather amusing!

 

[RainyDay]

Also somewhat irrelevant as I've pointed quite clearly it's not what we'd do.

You are assuming that my comment was solely directed at you. Bad assumption.