Inheritance & Property Tax if person is not married

Conology

The property of a friend of mine is in her name only.

She lives with her partner & their son.

They are NOT married.

A will exists leaving the property to her partner in the event of her death.

Question. As they are not married - In the event of her death... is her partner liable for a Tax ( Capital gains or Property Tax ) if she passes away.

Thank you

SureYWouldntYa

There would be exposure to Capital Acquisitions Tax of 33% (commonly called Gift or Inheritance Tax)

There would be a tax free amount of €16,250, and the balance above this would be taxed at 33%. E.g. if house is worth €200k, then the taxable value is €183,750, the tax charge would be circa €60k

Conology

https://www.boards.ie/discussion/comment/119906554#Comment_119906554

Thank you -

Just to follow on from what you state can you advise

1) If the couple were to get Married - would this still apply.

2) if the couple were to change the Mortgage/Ownership of the property into BOTH names - would it still apply?

3) If the house was left to their son, instead of the Father ( Co-habiting/unmarried etc ) would that override the tax implication?

Thank you for your help.

Geuze

(1) No CAT on any transfer of assets between spouses

ThreeGreens

What sureywouldntya said is 100% correct.

1. If they were married, then the tax would totally disappear. No CAT between married couples.
2. The mortgage itself would make no difference. But changing the property into both names means that she's giving her partner 50% of the property now. So that would mean that half the tax (approx) is owed now, and the other half is owed when she passes away.

Geuze

(2) is trickier

As they are not married, if he became a 50% owner of the house, this could only happen in two ways?

He pays her for half the house OR she gifts him half the house

If she gifts him half the house, would he be subject to CAT? I think so.

Conology

https://www.boards.ie/discussion/comment/119906778#Comment_119906778

What about the (3) question - If the house was left to their son, instead of the Father ( Co-habiting/unmarried etc ) would that override the tax implication?

ohnonotgmail

https://www.boards.ie/discussion/comment/119906893#Comment_119906893

If the house was left to the son then the tax-exempt portion would be €335,000. anything above that would be taxable at 33%

Conology

Thank you everyone for your replies, it's very much appreciated.

coylemj

https://www.boards.ie/discussion/comment/119906893#Comment_119906893

It would significantly increase the threshold before tax was due but it would put her partner in a precarious position. Suppose, by the time the woman dies, the father and son had fallen out and the son was in a long-term relationship, living with a partner in rented accommodation. He now owns the house so he could decide to move in with his partner and there would be nothing to stop him from giving the father his marching orders. At which point the father would be homeless.

For her partner's long-term protection and to eliminate any tax liability, they should get married. And she should then make a new will, leaving the house to him. Because a will is voided when you get married so if they got married and she died soon after without making a new will, she would have died intestate. In which case, the partner would get 2/3 and the son 1/3 of the house.

Conology

https://www.boards.ie/discussion/comment/119907249#Comment_119907249

Thanks for that observation... it's certainly another consideration.