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Bank repossession and buying back by relative

  • 19-09-2017 12:27pm
    #1
    Registered Users, Registered Users 2 Posts: 1,622 ✭✭✭


    Thanks in advance for any opinions.

    I have a relative with a large bank debt. They received a judgement order against their family home and so are being forced to sell.

    Given their age their family have come up with the money to buy the house. Their family have come to me (distant relative) as a third party to ask that I buy the house at market value with their money and sign an undertaking to transfer the house back to them once their bank debt has been cleared. Note that sale of the house will only partly meet the outstanding debt.

    I've asked to see the draft undertaking. Is there anything I should be concerned about from a legal or tax perspective in this transaction.


Comments

  • Registered Users, Registered Users 2 Posts: 20,193 ✭✭✭✭Cyrus


    Thanks in advance for any opinions.

    I have a relative with a large bank debt. They received a judgement order against their family home and so are being forced to sell.

    Given their age their family have come up with the money to buy the house. Their family have come to me (distant relative) as a third party to ask that I buy the house at market value with their money and sign an undertaking to transfer the house back to them once their bank debt has been cleared. Note that sale of the house will only partly meet the outstanding debt.

    I've asked to see the draft undertaking. Is there anything I should be concerned about from a legal or tax perspective in this transaction.

    id get the tax implications of this checked out


  • Registered Users, Registered Users 2 Posts: 3,884 ✭✭✭Tzardine


    Fair play to you, it is very decent of you to try and help.

    If a distant relative came to me and asked me to do it I would send them back to the distance. Sounds like a lot of hassle and risk for you with no reward.


  • Registered Users, Registered Users 2 Posts: 6,844 ✭✭✭RobbieTheRobber


    Thanks in advance for any opinions.

    I have a relative with a large bank debt. They received a judgement order against their family home and so are being forced to sell.

    Given their age their family have come up with the money to buy the house. Their family have come to me (distant relative) as a third party to ask that I buy the house at market value with their money and sign an undertaking to transfer the house back to them once their bank debt has been cleared. Note that sale of the house will only partly meet the outstanding debt.

    I've asked to see the draft undertaking. Is there anything I should be concerned about from a legal or tax perspective in this transaction.

    Do you already own property?
    Be aware that purchasing this property will mean your are no a longer a first time buyer (if you still are currently) and would not be entitled to any tax concessions or grants should any be available at the time you purchase another property for yourself.


  • Registered Users, Registered Users 2 Posts: 9,814 ✭✭✭antoinolachtnai


    Who is going to pay your legal and other costs here? That is the main thing at the outset. You need proper advice and cannot be expected to shoulder the cost for free or to be left out of pocket. They are the ones with the pot of money, so they need to pay these costs up-front for you. The legal and other advice may expose other issues.

    The issue that would concern me is that you might be placing a lot of trust in them if you do this. But they will not be placing much trust in you, since they are going to have you sign this legally binding undertaking.


  • Registered Users, Registered Users 2 Posts: 9,814 ✭✭✭antoinolachtnai


    OSI wrote: »
    Surely you'll have to pay gift tax/CAT on the money they give you to buy the house, which as a distant relative is likely to be 33% on everything over €16,250.

    It's not really a gift or capital acquisition though. It's money with strings. It's a loan, at most.


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  • Registered Users, Registered Users 2 Posts: 7,223 ✭✭✭Michael D Not Higgins


    This is on very dodgy ground. If you are in any way seriously pursuing this, seek professional advice immediately from a tax accountant and a solicitor.


  • Registered Users, Registered Users 2 Posts: 1,622 ✭✭✭Baby01032012


    Thanks all.

    I think I'll post on the taxation forum as well.

    I will get legal and tax advise.

    I'd like to help as it's my dad sister/family. I've asked my solicitor to look at it. I won't be doing anything until I've had the full picture but it's good to get your opinions. The family have said they will cover all costs. However I am concerned from a tax view point of any CAT on the transfer of funds and then on house transfer back.

    Would anyone know why the family can't buy it? I'm still a relative so hardly an independent party.


  • Registered Users, Registered Users 2 Posts: 2,342 ✭✭✭seagull


    I would guess that if immediate family buy the property, then there will be questions about the source of the money, and whether some of it should have been used to pay off the debt.


  • Closed Accounts Posts: 942 ✭✭✭Ghekko


    When the final bill from solicitor comes to your door can you be 100% certain the family will have the funds to pay for it? Will they pay for your consultation with your accountant and solicitor before you even make a decision? I personally wouldn't do it especially given that none of the family will.


  • Posts: 24,714 [Deleted User]


    If they want to remain anonymous is there not a way of purchasing through a solicitor. Can't a solicitor purchase for their "client" rather than naming names etc?


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  • Registered Users, Registered Users 2 Posts: 14,345 ✭✭✭✭jimmycrackcorm


    I've asked to see the draft undertaking. Is there anything I should be concerned about from a legal or tax perspective in this transaction.

    You'll be on the hook for stamp duty.
    It's not really a gift or capital acquisition though. It's money with strings. It's a loan, at most.

    The Fr. Ted resting in my account strategy.

    Better get good advice otherwise it'll come back to bite you once word gets out.


  • Registered Users, Registered Users 2 Posts: 4,329 ✭✭✭Homer


    Surely you would have to supply your PPS number on closing to your solicitor and revenue would look at your position in relation to tax due.


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