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Will

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  • 11-08-2021 5:52pm
    #1
    wirefence
    Registered Users Posts: 5 ✭


    According to a will, Person A is due to inherit money and his sibling Person B is due to inherit the family home. The value of the family home is equal to the amount of money Person A is due to inherit.

    Is it possible to arrange matters such that Person A would inherit the family home and Person B would inherit the money Person A was due to inherit? This would be a direct swap that would benefit both people and that is agreed to by both people.

    For tax and other reasons, it would benefit both people for the swap to take place before probate or during probate. Is it possible to arrange such a swap?



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    #2
    wirefence
    Registered Users Posts: 5 ✭wirefence


    https://www.boards.ie/discussion/2058203501/will

    Is it possible during probate to transfer the house directly from a parent's estate to Person A without transferring it to Person B first?

    Is it possible during probate to transfer money directly from a parent's estate to Person B without transferring it to Person A first?



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    #3
    Jim_Hodge
    Registered Users Posts: 10,500 ✭✭✭✭Jim_Hodge


    Deleted

    Post edited by Jim_Hodge on


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    #4
    Peregrinus
    Registered Users Posts: 26,144 ✭✭✭✭Peregrinus


    Assume that A and B are both adults of full capacity. Assume that nobody else has any interest at all in the estate. Let's say the house is worth 500k; and the cash is exactly 500k.

    A and B and the executor of the estate can execute a deed of arrangement which, in effect, varies the will so that A will get the house and B will get the money. The executor will then transfer the house to A and pay the money to B. Even though this is not what the will provides for, the executor can safely do this, because the only people who could in theory sue him for not administering the estate in accordance with the terms of the will are party to the transaction; they can't sue the executor for doing what they asked him to do.

    From a tax point of view, B has sold his expectation of inheriting the house to B for 500k. Since his expectation of inheriting the house was worth 500k, that's a sale for market value. He acquired it when it was worth 500k, so B has no CGT liability. On the same reasoning, there is no element of gift here to A, so A has no CAT liablity on any deemed gift from B.

    (Any CAT liability that A or B may have in inheritances from the deceases is unaffected. They still have that liablity.)

    So, it seems to me, in principle we're good. You can do this, if everyone is agreed, and there are no adverse tax consequences.

    A, B and the executor should all have separate legal advice.



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