Saturday 24 March 2018

Insolvency Bill will apply to the person

I'm without a tenant in my rental property and am in arrears on the mortgage. I can't see it being let any time soon. Would the proposed insolvency legislation apply to me without affecting my domestic mortgage, which I am paying fully?

The measures in the Insolvency Bill apply to the "person" rather than one mortgage.

Your entire financial standing is taken into account, and as you are up to date on your home loan, there would be little sympathy extended to you on the investment one.

Karl Deeter of says: "I have personally shared in this brand of frustration with property that seems 'un-rentable'.

"There is an answer, but it may not be to your liking. Drop the price you are seeking. Vacant properties are not in anyone's interests.

"Ask 70pc of whatever anybody else is looking for in the same area. Then you'll get the pick of the litter and you can opt for the best tenant.

"If your mortgage is not on interest-only, talk to your bank and see if they will do that for you to get you through the medium term.

"That, and a small amount of rent may well be all you need to get over the hump."

My son has a young family and their flat is too small. We have decided to let them move into our house while he sells his flat and buys a small house for us. His brother, who lives abroad and is well off, is fine with this, and we will leave him the "new" house, but I am concerned there may be tax implications?

You have many issues to deal with here which may have a tax consequence: (i) the disposal of your son's flat, (ii) the gift of your house to him, (iii) the purchase of the smaller house for you, (iv) your second son's inheritance.

Of the first, as he is selling his Principal Private Residence, he will not pay tax on its disposal. As to the fourth, whatever rules are in place at the time of your death will apply regarding the inheritance.

Of the other two, Darren Byrne, Senior Tax Expert with says: "The gift of your home to your son results in a potential Capital Acquisitions Tax (CAT) exposure for him. A tax-free threshold of €250,000 applies. If the property has a market value over €250,000, CAT at 30pc will be payable on the excess.

"The purchase and subsequent gift of a smaller property by your son to you results in a Capital Gains Tax (CGT) exposure for him (however, if these transactions take place in quick succession, a gain is unlikely to arise) and a CAT exposure for both of you. Gifts from children to parents are Group B -- tax-free threshold of €33,208.

"Again, CAT at 30pc is payable on the value of any gift in excess of this amount.

"Planning opportunities may exist to structure the above transactions in a more tax-efficient way."

Talk to a financial advisor before embarking on your action.

Indo Property

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