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Home economics: Sinead Ryan answers your property questions



Where is a safe place to keep your title deeds?

Where is a safe place to keep your title deeds?

Where is a safe place to keep your title deeds?

I own a flat in Dublin purchased in 1986 at €70,000, now valued around €350,000. If I sell now, I understand I will be liable for Capital Gains Tax (CGT). But can I then gift the amount from the sale to my son within his limit for Gift Tax or bypass this altogether by gifting the flat directly to him?

A. This is a complex query on two fronts. While CGT is an issue, Revenue makes no distinction between cash or any other asset gifted, or bequeathed to another person. So, you certainly cannot avoid CGT or Gift Tax by transferring a property, as opposed to cash, to your son. Both are considered 'disposals' by Revenue.

I asked Barry Flanagan of Taxback.com for his advice. "The CGT liability would be approximately €77,200, assuming your annual exemption of €1,270 and no incidental costs on acquisition and disposal," he said.

"If you choose to sell the property now and gift the cash, the consequences for you and your son will be the CGT payable by you and possible Capital Acquisitions Tax (CAT) at 33pc on the taxable value of the gift (less the €3,000 annual small gift exemption), payable by your son. If this is the first time your son is receiving a gift from you or your spouse, there will be no CAT liability, as the value of the gift falls within the Group A Threshold of €310,000. If, however, your son has already used part or the entirety of his Group A threshold, a CAT liability may arise.

"If you choose to gift the property, the value of the gift receivable by your son is the market value, €350,000. As this exceeds the Group A CAT Threshold, CAT at 33pc would be due on the excess. However, where CAT and CGT arise on the same event, a credit for the CGT paid is available, and CAT is due only to the extent it exceeds the CGT paid. It should be noted, however, that in such a scenario, your son should not dispose of the property within two years of the gift, as otherwise the Revenue will seek a clawback of the taxes".

Q. You recently featured a question from someone who had lost the deeds to her house. Our situation is that we have the title deeds but are looking for a safe place to hold them, as our bank will no longer keep them for us. Have you any recommendations? We were told of a place called Merrion Vaults but do not know anything about them. Would we have any guarantee that the deeds would be 100pc safe?

A. It used to be the case that Irish banks had great big vaults underneath their head offices, or sometimes off-site to store deeds, records and files. With the advent of so many online services, these have been phased out and I cannot think of a bank here that now offers these services to customers, which is a pity. I expect they really don't want the responsibility. I got quite a number of enquiries about this topic in the last couple of weeks, so it's clearly something that concerns many people.

Less than 40pc of private dwellings in Ireland are mortgaged, so that means that the majority of home-owners are responsible for storing their own house deeds - an onerous obligation, since they are vital for sale or transfer.

I contacted a spokesman from the company you named - Merrion Vaults, which is Ireland's first independent safe deposit box facility, and has been operating for four years. Based in Dublin's Merrion Square, they offer ten different 'box' sizes; the standard one, suitable for house deeds or other important documents, costs €199 per annum.

This includes insurance cover of €10,000 and each owner is given a unique key. They tell me deeds are commonly stored, along with cash, jewellery and computer memory backup devices. It has the added bonus of reducing your house insurance premium, if you let your insurer know, as some All Risks items no longer need to be covered.

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The Ryan Review

Ongoing reductions in the number of mortgages in arrears continue, with the Central Bank reporting a 15th straight month of declines, leaving just 10pc of accounts in trouble.

Restructuring options are moving upwards and 87pc of these are deemed to be meeting the terms of the new arrangements. However, there the good news ends. Buy-to-Let mortgage arrears are still stubbornly high, with 14,367 in arrears over two years.

Although out-sourcing debt to non-bank funds (and just 60pc of them are regulated here) continues, the pace remains terribly slow. What possible reason could banks have to hold these properties on their books, especially the ones in the leafier suburbs of Dublin, despite their basket-case repayments? Hmmm.

As an aside, in last week's column I pointed to 20 housing units for sale at knockdown prices in Munster which could be bought to house homeless families. So, kudos to the Housing Agency for its purchase of two former B&Bs in Clontarf (for almost €2million, mind) to house 13 families, albeit temporarily. Locals don't seem impressed at the effort to make inroads into the homeless crisis with one saying the "hairs stood up" on the back of her neck at the news.

Nimby-ism aside, neighbours should be used to dubious characters living among them… former jailbird TD Ivor Callely lived on the same road for years.

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