What to do 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.

the_syco

Buy a house nearby with the remainder of cash? Or do you have a house that you're moving into?

davidod1

Living in my own house, the one that has the small balance due on the mortgage.
Dave

the_syco

davidod1 wrote: »

Living in my own house, the one that has the small balance due on the mortgage.
Dave

Ah yeah okay. I missed that bit

Investing at the moment does not seem like a good idea. As above, putting it into a bank would be the best idea. Some bank offer more interest for money that is or a large amount, and also they offer schemes of added bonuses if the money is going to be there for a set time, such as 10 years, etc. Not sure if this is a savings, or some sort of investment, though.

davidod1

Yeah - it looks like splitting it 3 ways, one short, 1 medium and 1 say 10 years with 3 different institutions might be the safest way out at the moment.

Many thanks for the interest.

Dave

Freddie59

davidod1 wrote: »

Yeah - it looks like splitting it 3 ways, one short, 1 medium and 1 say 10 years with 3 different institutions might be the safest way out at the moment.

Many thanks for the interest.

Dave

Like you, we have cash left from the sale of our home and were very worried about where it would be secure. We have it on deposit with NIB. The rate isn't great, but they're covered by the Danish Government banking guarantee, which is a lot more secure that the Irish one.

D3PO

Freddie59 wrote: »

, but they're covered by the Danish Government banking guarantee, which is a lot more secure that the Irish one.

lets stick to the facts here your 100% COVERED by the Irish scheme until september 2010 so there is no such thing as being more secure

The_Conductor

Government bonds? Better return than you'll get on any deposits- and if the government defaults- well- lets say its a safer bet and a better return than from any of the commercial businesses......

johnnyskeleton

What line of work were you in?

Just to throw it out there, if you work in an otherwise productive sector but your employer has run out of money for other reasons, have you considered starting up your own business? It would definately be on the riskier side of things to do with your money, but it would give you something to work at and to be honest I would prefer to lose my money running my own company rather than by putting it into property/shares/an insolvent bank.

Alternatively, what would be your dream job, and would you consider going back to college or otherwise trying to get into it (e.g. writing a book, becoming an actor, scuba instructor in thailand(nevermind what the missus says)).

Again just to have a think about it.

Blackjack

Freddie59 wrote: »

the Danish Government banking guarantee, which is a lot more secure that the Irish one.

No it isn't.

davidod1

Don't feel like starting a business - started collecting the OAP last year. Really just want make sure that whatever time is left for meself and the missus is as secure as possible. Wouldn't mind seeing a little of the world before we go either.

Amway - Thanks to all the contributors above.
Dave

Freddie59

D3PO wrote: »

lets stick to the facts here your 100% COVERED by the Irish scheme until september 2010 so there is no such thing as being more secure

The facts, as you describe them are that the Irish state guarantee is not worth the paper it is written on, if called in at any point. It is the equivalent of 250% of GDP (YES THAT'S TWO HUNDRED AND FIFTY PERCENT), whereas in most other European countries offering the same guarantee it is 17% of GDP. Let's stick to the facts indeed.;)

Freddie59

Blackjack wrote: »

No it isn't.

I refer you to my reply above.

Have a look at this:

http://cib.natixis.com/flushdoc.aspx?id=44816

We are guaranteeing FOUR HUNDRED AND EIGHTY BILLLION EURO.

It's nuts.:mad:

The_Conductor

Freddie59 wrote: »

I refer you to my reply above.

Have a look at this:

http://cib.natixis.com/flushdoc.aspx?id=44816

We are guaranteeing FOUR HUNDRED AND EIGHTY BILLLION EURO.

It's nuts.:mad:

If all property related debts are enumerated in the guarantee- its actually more in the region of 1.3 Trillion Euro. This is partially why the Irish government now has to pay over 2% more than the Germans on its sovereign debt.

Blackjack

Freddie59 wrote: »

I refer you to my reply above.

Have a look at this:

http://cib.natixis.com/flushdoc.aspx?id=44816

We are guaranteeing FOUR HUNDRED AND EIGHTY BILLLION EURO.

It's nuts.:mad:

Note from your attachment:

Country Maximum volume guaranteed
Ireland: Estimated at EUR 485 bn
Denmark: Unlimited


Which figure are you more comfortable with?.

jetski

EBS have a decent little 3 month term fixed save account.... you could lodge the cash in there and only draw down the interest and just spend that which should be a nice few hundred every 3 months.... the account auto renews its term if you dont writh to a letter to cancel.... think 25k is the min so you should have no issues there.

Freddie59

Blackjack wrote: »

Note from your attachment:

Country Maximum volume guaranteed
Ireland: Estimated at EUR 485 bn
Denmark: Unlimited


Which figure are you more comfortable with?.

The Danish one - everytime. Let me ask you this;

Under the current circumstances, which country would you think has the greatest chance of going bankrupt. Combine last weeknds announcement that soldiers who served in the LEB are now poised to make claims:rolleyes: which could - literally - bankrupt the nation. And Iºll go with Denmark.

Mr. Presentable

Buy prize bonds with it.

IDCI

davidod1 wrote: »

Don't feel like starting a business - started collecting the OAP last year. Really just want make sure that whatever time is left for meself and the missus is as secure as possible. Wouldn't mind seeing a little of the world before we go either.

Amway - Thanks to all the contributors above.
Dave

Sounds like a plan!

Buying up property in a year or so may well be a good long-term investment, but I'd say if you're more interested in medium term returns then going down the energy route might be better?

Plenty of good companies getting started in renewables right now that could be looking at 5 year returns (OpenHydro, etc.). I'm also quite taken by the idea of micro-hydropower that the German Chamber of Commerce were pushing there recently.

bobbiw

davidod1 wrote: »

Living in my own house, the one that has the small balance due on the mortgage.
Dave

Dont put in on deposit its a waste.

You need to find a good investment broker who can put it in relatively safe investments.

If you think houses are cheap you should look at the stocks. You could turn that into 1m in 4-5 years.

Blackjack

Freddie59 wrote: »

The Danish one - everytime. Let me ask you this;

Under the current circumstances, which country would you think has the greatest chance of going bankrupt. Combine last weeknds announcement that soldiers who served in the LEB are now poised to make claims:rolleyes: which could - literally - bankrupt the nation. And Iºll go with Denmark.

I'm glad you understand the concept that and that in your opinion an "Unlimited" Guarantee is "Safer" than one thats Estimated at EUR 485 bn. Your source, not mine. :rolleyes:

I know which Bank my money's with, it ain't Danish. If my Tax money is going to have to go help the Irish Banks, I don't see why my savings should go help a Danish one. It's a bit self defeating, but each to their own.

bobbiw

IDCI wrote: »

Sounds like a plan!

Buying up property in a year or so may well be a good long-term investment, but I'd say if you're more interested in medium term returns then going down the energy route might be better?

Plenty of good companies getting started in renewables right now that could be looking at 5 year returns (OpenHydro, etc.). I'm also quite taken by the idea of micro-hydropower that the German Chamber of Commerce were pushing there recently.

There is no way Irish property is a good long term investment. The country very easily could go bankrupt in the next couple of years.

Maybe if you pick up an apartment in town for 20k but thats not happening for the next few year (i dont think it will but 50k is reasonable)

As soon as germany and france get more stable watch interest rates double. And europe has no time for Ireland after the lisbon debackle

Freddie59

Blackjack wrote: »

but each to their own.

Oh you can sing that one.;):D

But I ask you again:

Ireland or Denmark. Which do you think has the biggest potential to go bankrupt - very quickly. I am not being unpatriotic - just realistic.

Fighting Irish

jetski wrote: »

EBS have a decent little 3 month term fixed save account.... you could lodge the cash in there and only draw down the interest and just spend that which should be a nice few hundred every 3 months.... the account auto renews its term if you dont writh to a letter to cancel.... think 25k is the min so you should have no issues there.

They also have a premium account that pays 7+%..the minimum to open a premium account is €150k

dblennon

get to a broker and buy the CRH finance BV 7.375% GTD MTN 28/05/14

in english thats a bond that'll give you an annual return of €17,700 (on €300,000)after tax (20%)which you may be exempt from.

the bond is guarenteed for the next 5 years.

Blackjack

Freddie59 wrote: »

Oh you can sing that one.;):D

But I ask you again:

For the Record, we are probably more likely than Denmark to go bankrupt, but that is unlikely to happen in either case. We're not in as bad a state as people like to think we're in, although we're not in the best of health all the same.
I just don't see the point in supporting foreign banks when its in your own interest to try to help the Irish ones as much as you can.

Freddie59

Blackjack wrote: »

For the Record, we are probably more likely than Denmark to go bankrupt, but that is unlikely to happen in either case. We're not in as bad a state as people like to think we're in, although we're not in the best of health all the same.
I just don't see the point in supporting foreign banks when its in your own interest to try to help the Irish ones as much as you can.

No chance, I'm afraid. Would these be the same Irish banks who have hovered around us like vultures for years, aiding and abetting the unsustainable acceleration in house prices for the past 10 of those years?

I couldn't give a fiddlers about them. They - and the 'developers' - should have been left go to the wall as the failed business entities that they are.:mad:

Blackjack

Freddie59 wrote: »

No chance, I'm afraid. Would these be the same Irish banks who have hovered around us like vultures for years, aiding and abetting the unsustainable acceleration in house prices for the past 10 of those years?

I couldn't give a fiddlers about them. They - and the 'developers' - should have been left go to the wall as the failed business entities that they are.:mad:

Your Tax money is already supporting them, so putting your deposits with a different bank for a lower interest rate is completely self defeating.

Your Money, do what suits you with it.

geem

Freddie59 wrote: »

No chance, I'm afraid. Would these be the same Irish banks who have hovered around us like vultures for years, aiding and abetting the unsustainable acceleration in house prices for the past 10 of those years?

I couldn't give a fiddlers about them. They - and the 'developers' - should have been left go to the wall as the failed business entities that they are.:mad:

I'm with Freddie59 on this one. I would spread the money around several different accounts to avail of different country's guarantee schemes.
If I had a chunk of money I would be much more interested in protecting it against Ireland's potential bankruptcy than being patriotic.
The people who set up and encouraged the great ponzi scheme that formed the bubble and the subsequent catestrophic collapse weren't acting out of of patriotism.
As for our tax money bailing out the banks well that is so and is sickening but there's not a lot we can do about that. However, why would the the unpalatable fact that the bank is transferring our tax money to bail out banks etc make us want to give them another lump sum on top of it?

Blackjack

geem wrote: »

If I had a chunk of money I would be much more interested in protecting it against Ireland's potential bankruptcy than being patriotic.

The people who set up and encouraged the great ponzi scheme that formed the bubble and the subsequent catestrophic collapse weren't acting out of of patriotism.
As for our tax money bailing out the banks well that is so and is sickening but there's not a lot we can do about that. However, why would the the unpalatable fact that the bank is transferring our tax money to bail out banks etc make us want to give them another lump sum on top of it?

Seems you have nothing to worry about.

Honestly, each to their own. I just don't understand supporting the profits of Foreign Banks when the Irish ones are offering depositors better rates and can probably benefit the country more by having the deposits than a foreign one.

Punishing them now is a bit daft - if we have to Nationalise more than Anglo, we're in deeper water than we are now.

Do you think National Irish Bank, Ulster Bank and the rest of the non-Irish Banks weren't up to the same thing?. Why apply the theory of just punishing the Irish Banks?.

geem

It's not about punishing the banks it is about protecting the posters cash. Irish banks offer higher interest rates because they are desperate for deposits and the reason they are desperate is because they are in worse shape. Gov doesn't have the money if the guarantee is called on.
Didn't see any patriotism from the banks when they were getting us into this mess and still not seeing it.

Blackjack

geem wrote: »

It's not about punishing the banks it is about protecting the posters cash. Irish banks offer higher interest rates because they are desperate for deposits and the reason they are desperate is because they are in worse shape. Gov doesn't have the money if the guarantee is called on.
Didn't see any patriotism from the banks when they were getting us into this mess and still not seeing it.

As I mentioned - each to their own.
Banks outside of Ireland are offering better rates than ours, that I can guarantee you.
Lets face it - the Banks were only lending people the money that people wanted to borrow. They didn't create this mess on their own.