Parents Mortgage- can I help them?

loopysilvette

I have come into money by selling a property I bought in the UK a few years ago- it was supposed to be a long term investment to act as my pension but being a 'landlord' was way more hassle than I wanted. 
So I have about €25k sitting there waiting to be invested. And I want to give it to my parents for them to put it towards their mortgage- they were very stupid a good few years back and remortgaged and are now left owing €45k+ on their property. 
In my mind, this will take serious pressure off them or even allow them to pay their mortgage back in half the time. 
But of course- this is my investment money and will want it back as my nest egg/pension fund after they pass away. I haven't even thought about interest or inflation yet. I've spoken to my sister, only other sibling, who is fine with me 'taking more inheritance' in order to take the pressure off the parents now,
But I need to know the legalities and ins and outs of all of this before I offer it to my parents. 
What is the best way to do this without them being stung for tax on receiving the 'gift' and then me being stung twice when I need to pay tax on my 'inheritence' even though really this is a loan which will not need to be paid back until they die (morbid!) 
Can anyone offer any advice on this, or even let me know where to start looking to read up/contact people? 
TIA

Geuze

http://www.revenue.ie/en/tax/cat/index.html

Read about CAT.

Hillybilly4

Another thing you might want to consider is what would happen if either of your parents needed Nursing Home care? Their asset, the house, has to be taken into account to pay NH fees.

scheister

loopysilvette wrote: »

I have come into money by selling a property I bought in the UK a few years ago- it was supposed to be a long term investment to act as my pension but being a 'landlord' was way more hassle than I wanted. 
So I have about €25k sitting there waiting to be invested. And I want to give it to my parents for them to put it towards their mortgage- they were very stupid a good few years back and remortgaged and are now left owing €45k+ on their property. 
In my mind, this will take serious pressure off them or even allow them to pay their mortgage back in half the time. 
But of course- this is my investment money and will want it back as my nest egg/pension fund after they pass away. I haven't even thought about interest or inflation yet. I've spoken to my sister, only other sibling, who is fine with me 'taking more inheritance' in order to take the pressure off the parents now,
But I need to know the legalities and ins and outs of all of this before I offer it to my parents. 
What is the best way to do this without them being stung for tax on receiving the 'gift' and then me being stung twice when I need to pay tax on my 'inheritence' even though really this is a loan which will not need to be paid back until they die (morbid!) 
Can anyone offer any advice on this, or even let me know where to start looking to read up/contact people? 
TIA

The way I see it your not giving your parents a gift of the you are giving an interest free loan.
The loan is repayable at any given time. If your parents die before the debt is paid off it falls to the estate to pay the debt.
So their should be no cat issues and the deemed gift of the interest is well covered by the annual exemption.
When your parents die the loan is not part of the inheritance so their is no issue for CAT as it is actually the repayment of the debt.

Penguin3029

scheister wrote: »

loopysilvette wrote: »

I have come into money by selling a property I bought in the UK a few years ago- it was supposed to be a long term investment to act as my pension but being a 'landlord' was way more hassle than I wanted. 
So I have about €25k sitting there waiting to be invested. And I want to give it to my parents for them to put it towards their mortgage- they were very stupid a good few years back and remortgaged and are now left owing €45k+ on their property. 
In my mind, this will take serious pressure off them or even allow them to pay their mortgage back in half the time. 
But of course- this is my investment money and will want it back as my nest egg/pension fund after they pass away. I haven't even thought about interest or inflation yet. I've spoken to my sister, only other sibling, who is fine with me 'taking more inheritance' in order to take the pressure off the parents now,
But I need to know the legalities and ins and outs of all of this before I offer it to my parents. 
What is the best way to do this without them being stung for tax on receiving the 'gift' and then me being stung twice when I need to pay tax on my 'inheritence' even though really this is a loan which will not need to be paid back until they die (morbid!) 
Can anyone offer any advice on this, or even let me know where to start looking to read up/contact people? 
TIA

The way I see it your not giving your parents a gift of the you are giving an interest free loan.
The loan is repayable at any given time. If your parents die before the debt is paid off it falls to the estate to pay the debt.
So their should be no cat issues and the deemed gift of the interest is well covered by the annual exemption.
When your parents die the loan is not part of the inheritance so their is no issue for CAT as it is actually the repayment of the debt.

But be very careful. An interest free loan has a gift element, ie not charging the interest. This is a gift for CAT purposes, and would be calculated as what the commercial rate of interest would be on such a loan. Your parents may be able to rely on the provisions of the small gift exemption, but that would depend if you gift them anything else during the years.

The small gift exemption is currently €3,000 per year.