Advice on gift

markens2

My better hallf's parents are giving us a massive gift of money to help us buy a house.
We're not married but will be soon. All was going well and we had an offer accepted. Her parents suggested then that I will need to sign a document stating that should something happen to the other half or our marriage within 2 years then the gift would go back to them.

I was taken aback by that to say the least considering we weren't told until after the booking deposit was paid.

The bank have said that in reference to a gift that they must sign a letter stating that they will place no claim on the house.

Any advice would be greatly appreciated. Not legal advice but others might understand this better than me.

MouseTail

Its their money, they can put whatever stipulations they want on it. I understand you might feel insulted, but its a gift with strings, they probably won't sign the letter from the bank. You should speak to your solicitor, there may be a way around it with buying as tenants in common.

The_Morrigan

It's not a gift if there are conditions attached and if they sign the letter from the bank stating it is a gift that is a fraudulent statement.

Go to a solr and seek legal advice on the matter.

Clive

Gifts often have conditions attached e.g. an engagement ring is a gift given based on the promise of marriage. If the marriage doesn't take place the gift must legally be returned (if wanted).

However the Morrigan is correct in that if you are using this gift as part of a mortgage application, you should ask your solicitor to clarify the situation.

Alan Shore

I think it's very insightful of them to make arrangements for their daughter or other children that they have.

If your partner were to die you would presumable inherit a house with no mortgage which they gave a "massive gift of money" toward.

If you were to break up and sell the house you would get half the "massive gift of money".

I presume that the gift is in fact going toward their daughter who is putting it toward the purchase of the house.

Surely you can see their point of view.

The_Conductor

Its far from unusual- any mortgage advisor in any Irish bank will be thoroughly familiar with this type statement.

Normally in a situation like this- depending on how the parents who are donating the gift want to safeguard their gift- they may go as far as lodging a separate legal mortgage on the property- with a separate legal stipulation that it is not intended the mortgage be repaid, save in certain circumstances, and the purpose of the gift is to provide accommodation for their offspring, period.

Its far from unusual- and you shouldn't be insulted by it- the parents are simply trying to do their best for their child- as indeed any parent might be expected to.

A 2 year stipulation- such as they are suggesting- is extremely minor- I've seen one stipulation (involving a farm) stating that its in perpetuity- and the spouse will never have a claim on the property.

Farming organisations and some other interest groups- are pushing hard to make these type agreements mainstream, and introduce prenup agreements in tandem with this.

Zamboni

Their request is not unreasonable but to be fair, They should have explained their condition prior to you making offers and arranging finance for the remaining portion.
Can you and your partner buy on your own steam?

Tigger

tell them to take you or leave you
a gift is a gift
a consideration is the name for an engagement ring or a dowery

http://legal-dictionary.thefreedictionary.com/consideration

Tigger

The_Conductor wrote: »

Its far from unusual- any mortgage advisor in any Irish bank will be thoroughly familiar with this type statement.

Normally in a situation like this- depending on how the parents who are donating the gift want to safeguard their gift- they may go as far as lodging a separate legal mortgage on the property- with a separate legal stipulation that it is not intended the mortgage be repaid, save in certain circumstances, and the purpose of the gift is to provide accommodation for their offspring, period.

Its far from unusual- and you shouldn't be insulted by it- the parents are simply trying to do their best for their child- as indeed any parent might be expected to.

A 2 year stipulation- such as they are suggesting- is extremely minor- I've seen one stipulation (involving a farm) stating that its in perpetuity- and the spouse will never have a claim on the property.

Farming organisations and some other interest groups- are pushing hard to make these type agreements mainstream, and introduce prenup agreements in tandem with this.

sooner revenue crack down on gifting farms down the better

amdublin

Tigger wrote: »

tell them to take you or leave you
a gift is a gift
a consideration is the name for an engagement ring or a dowery

http://legal-dictionary.thefreedictionary.com/consideration

Agree. But they don't have to give the money either.

I know of at least two of my friends who got money from one set of the parents and something similar was agreed.

sawdoubters

you have to pay taxes on it

http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html


Firstly, if the recipient is resident or ordinarily resident in Ireland, there is a charge to Irish Gift Tax on the amount she receives. Several deductions apply, to the amount paid at the taxable rate of 25%. There is firstly an annual exemption applicable, which is €3,000 per year. Secondly, as the recipient is not a blood relative, she falls within Group C of the class of recipients of gift tax. This entitles here to receive in total €20,740 in her lifetime, from non-blood relatives free of gift tax. Additionally, there is consumer price multiplier applied to the amount she is entitled to receive tax free. For 2010, (which applies to gifts given during 2009) the index multiplier is 1.361. So, the sum of €20,740 is multiplied by 1.361 to give the amount she is entitled to receive tax free from you. Finally, the balance of the sum up to €200,000 is taxed at the rate of 25% tax.

petecork

some of your figures are incorrect

the amount is €15,075, not €20,740

And the rate of tax is 33% not 25%

not sure why you are talking about gifts given during 2010??

and the girl receiving the gift is the daughter, so its tax free

sawdoubters wrote: »

you have to pay taxes on it

http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html


Firstly, if the recipient is resident or ordinarily resident in Ireland, there is a charge to Irish Gift Tax on the amount she receives. Several deductions apply, to the amount paid at the taxable rate of 25%. There is firstly an annual exemption applicable, which is €3,000 per year. Secondly, as the recipient is not a blood relative, she falls within Group C of the class of recipients of gift tax. This entitles here to receive in total €20,740 in her lifetime, from non-blood relatives free of gift tax. Additionally, there is consumer price multiplier applied to the amount she is entitled to receive tax free. For 2010, (which applies to gifts given during 2009) the index multiplier is 1.361. So, the sum of €20,740 is multiplied by 1.361 to give the amount she is entitled to receive tax free from you. Finally, the balance of the sum up to €200,000 is taxed at the rate of 25% tax.

Sligo1

sawdoubters wrote: »

you have to pay taxes on it

http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html


Firstly, if the recipient is resident or ordinarily resident in Ireland, there is a charge to Irish Gift Tax on the amount she receives. Several deductions apply, to the amount paid at the taxable rate of 25%. There is firstly an annual exemption applicable, which is €3,000 per year. Secondly, as the recipient is not a blood relative, she falls within Group C of the class of recipients of gift tax. This entitles here to receive in total €20,740 in her lifetime, from non-blood relatives free of gift tax. Additionally, there is consumer price multiplier applied to the amount she is entitled to receive tax free. For 2010, (which applies to gifts given during 2009) the index multiplier is 1.361. So, the sum of €20,740 is multiplied by 1.361 to give the amount she is entitled to receive tax free from you. Finally, the balance of the sum up to €200,000 is taxed at the rate of 25% tax.

I haven't read through your posted link or figures... But a parent can "gift" the sum of €225,000 to their child tax free. Anything over €225,000 will then incur tax.

chocoroll

TS you're planning to marry your girl anyway (congrats!), why is it such a big deal for you? If all goes right you'll be with her far longer then 2 years Seems like a reasonable proposal then?