Property transfer

MagicSean

Have a little property question that I hope someone can help with. Assume a property is held jointly by A and B. B wishes to sell the property and A does not. A's son, C, offers to buy B's share of the property. A wishes to gift the other half to C thereby making C the full owner with a clause that A can reside their until death.

First off, is this possible or are there any satutory bars to this kind of transaction? It seems simple enought bar the clause part. Secondly, would C be required to pay stamp duty on the full amount of the home or just the share he is purchasing?

234

Yes, there would be statutory bars to this but it depends on whether the property is held in a joint tenancy or a tenancy in common.

If it's a joint tenancy then the tenancy cannot be severed unless the other party consents (S30 of the Land and Conveyancing Law Reform Act 2009). However, this requirement can be dispensed with if the consent is being unreasonably witheld (S31(2)(e) LCLRA 2009). This would create a tenancy in common.

Land held in a joint tenancy can also be partitioned by court order (S31(2)(a) LCLRA 2009)

If the land is held in a tenancy in common then it can also be partitioned. I think the share of a tenant in common can be sold but I'm not 100% sure.

I don't know about the tax questions.

Brain Stroking

All depends on joint tenancy or tenancy in common. Also depends on whether B wants to sell. If not, then there isnt much that can be done. Assuming B wants to sell:

If A & B hold jointly:
Consent to a sale is required before a transaction can proceed. House will be sold as a whole to C and C will pay stamp duty (which depends on the sale price). A can then arrange separately with C to give her share of the proceeds to him but he will pay Capital Acquisitions Tax on that gift He will be in Group A with regard to threshold. Threshold is €332,084 in 2011. Any past gifts will be taken into account, subtracted thereby reducing the threshold. So if the value of the house is less than double 332,084 (assuming no previous gifts) then the son will not pay any CAT. He will therefore only end up paying stamp duty on the total price of the house.

If A & B hold as tenants-in-common:
B's share can be bought by A. Stamp Duty is paid on the transaction so i'd guess that A will pay stamp duty on the contract price (which will be half the value of the house/B's nominated sale price). A then gifts the whole and C will receive a gift of the entire house, paying CAT on the whole (and C's threshold may not be enough to cover the value of the gift meaning that there will be more likely to be a CAT liability arising as opposed to the above).

That's my take on it

MagicSean

Assuming the property is held jointly, B has no objection to who purchases as long as they get their share of the money and the place is valued at €500k. From what you are saying it would seem that C would need to come up with the 500K and then have half of it gifted back afterwards. It seems a quite complicated procedure.

234

Brain Stroking wrote: »

All depends on joint tenancy or tenancy in common.

This is the most importan question and what you will need to answer before anything else.