What to with cash from the sale of a house.

davidod1

Hi Folks,

I will shortly have cash (€300,000+) from the sale of a house and I am looking for advise on what to do with it.

A bit of background though. This house was in my name but my late mother was living in it on her own for the past 40 years. I am married and have recently had to retire from work due to the company's inability to continue to pay wages. My wife has recently also had to give up work for health reasons. Our only income is now my pension and my wifes supplementory payment - combined = €380 per week.

Between loans and the balance of a mortgage there is just over €20,000 due to the bank. Otherwise apart from these there are only the usual running costs + health insurance, motoring costs etc.

I assume there is likely to be some CGT due but I have heard mention of an allowance due to special circumstances such as leaving the property available for the use of an elderly parent. Anyone know anything about this?

Either way there will be cash to invest and I will also need to make it provide a supplement to my income.

Any suggestions or further information on the taxation situation would be very welcome.

Dave

zod

start by putting on deposit .. somewhere like here

http://www.ulsterbank.ie/roi/personal/saving/instant-access/esavings-plus.ashx?coid=UB_IE_Savings_roi_saesavings

then get some advice .. there may be some way to shelter the return from Tax due to your pensionable status.

my two cents .. cash will be extreemly valuable in a few years time.. sit on it.

Time Magazine

Copying this thread over from Investments and Markets to Accommodation and Property because there are two issues here really, i.e. the disposal of the house and the use of the subsequent funds.

David, you'll need to check both threads for all the replies.

Économiste Monétaire

You could also try the Taxation forum for information on CGT. On what to do with the money, don't put it all in one basket in the form of common equity (like AIB and BoI, for example) and anyone who tells you that any investment is either risk free, or a 'sure thing', is an idiot and should be immediately ignored. Good luck and don't be hasty with long-term investment decisions in this environment.

samson09

33% gold,33%land,33% cash.:)

pirelli

SAVING's basic secure return
BONDS moderate return


EQUITES Good return risky

Fyffes
ISEQ ETF,
S&P Fair value ( this plan picks the low share priced companies around post recession and basically pumps and dumps them as well as having larger companies also.)
and S& P Platinum,

Crazy returns

Gamble Small sums on short term hops on Bank of America and Barclays, Bank Canadian TD and JPM...

Large sums for Long term on cisco and some russian companies like GAZPROM and Vimpel-Communications and also brazilian Petroleo Brasileiro SA (ADR) all of which can be found on the american adr exchanges.

davidod1

Some solid and interesting suggestions there guys. Many thanks for taking the trouble.
Dave

Raskolnikov

davidod1 wrote: »

This house was in my name but my late mother was living in it on her own for the past 40 years.

. . .

I assume there is likely to be some CGT due but I have heard mention of an allowance due to special circumstances such as leaving the property available for the use of an elderly parent.

If it was just your elderly mother living in the property, then there is no CGT due. From citizens information.

Gains or profit on the disposal of some assets are specifically exempted from Capital Gains Tax, these include:

Gains on the disposal of property owned by you (house or apartment) which was occupied by you or by a dependent relative as a sole or main residence. Restrictions may apply where the property was not fully occupied as a main residence throughout the period of ownership or where the sale price reflects development value.

Your elderly mother can be counted as a dependent relative.

silverside

That is a large sum of money and you should seek independent professional advice. Be aware that most advisers are commission based , good idea to find one who will charge a fixed fee and covers the whole market.

The answer depends on your attitude to risk and what you might want the money for (long term, short term, etc).

Firstly I would ensure you pay off all debts (credit card, car loan etc), make sure you are covered for health insurance, and always have a small amount of emergency cash available. One-off spending - you may want to extend your house/attic, repair your car, go on holiday, etc.

I wouldnt reccomend you leave it in a deposit account (cash) as inflation will eat away at your savings over the long term. Short term there are some good rates from Anglo etc thanks to the government guarantee - but check the guarantee details carefully !

Now is not a good time to be buying property.

I think a mix of global equity (shares) is a good idea, which you can draw on as required - the value may fluctuate year-to-year but over the long term equities have outperformed cash historically. Don;t restrict yourself to Irish shares (ISEQ) - you'd get better risk diversification by buying some European, UK and US shares too. ETF's are a good idea - low costs, diversified, easy to trade in. You could easily throw the lot into a "managed fund" from Irish Life or the like, which would do all the donkey work for you, but be aware that commissions can be quite high (5% or more).

People will recommend alternative investments (developing countries, metals, oil etc) but I think they should only be a small part of any balanced portfolio.

That's the basics, but I really think you need someone trustworthy to sit down with you and thrash out your options.

edit : Just to give an idea, if you bought an annuity with 300k it would provide you with an income of 15k flat for the rest of your life (assuming you're 55 now) - this would be subject to income tax so not really a good idea - but does give an indication what 300k can do.

davidod1

Thank you very much for the long and detailed respose. Some really good and well thought through advice there. Much appreciated.

Dave

davidod1

It is brilliant that there is not likely to be any CGT due. Many thanks Raskolnikov for pointing that one out.

Because directive is so clear; it also looks like I could talk directly to the Revenue Commissioners on it rather than have to pay an expensive consultant to make a tax return.

Dave

eamonnm79

Does the bit here"Restrictions may apply where the property was not fully occupied as a main residence throughout the period of ownership" not throw a spanner in the works?

davidod1

She was widowed for 37 years and 7 months and lived in the house 36 years and 5 months. They could hardly find fault with that.

Dave

cnocbui

Buy a shed load of gold or Platinum and sell it in a few months.

eamonnm79

davidod1 wrote: »

She was widowed for 37 years and 7 months and lived in the house 36 years and 5 months. They could hardly find fault with that.

Dave

But I thought it was in your ownership and you didnt live there.

davidod1

Correct on both counts. Purchased in 1967 in my name. Living in my own house since 1971.

eamonnm79

davidod1 wrote: »

Correct on both counts. Purchased in 1967 in my name. Living in my own house since 1971.

Sorry david i missread the original quote from the CIS. You should be fine.

pirelli

Gamble on the stock market and then Build a windfarm when things quieten down, You will make an exponential amount of money.

davidod1

Thanks Eamonn. I got worried for a moment in case there was something that I was missing.

On the windfarm - I don't think there would be enough to even buy the tip of a propeller.

Again - thanks to all.
Dave