What taxes will apply to my retiring?
I have run a successful business from home for more than 20 years. I am retiring now and want to pass it to my son, but continue living in the main part of the house. What is the tax implication for doing this?
This is a thorny area and you would be best served seeking professional legal advice.
Barry Flanagan of Taxback.com says that disposal of either property or business, whether sole trader or incorporated, is complex and will at a minimum have capital gains, capital acquisitions and stamp duty implications for all parties.
"Reliefs may be available on all taxes. If you are over 55 years of age and have owned the assets for over 10 years, you may qualify for Retirement Relief from Capital Gains Tax (CGT). As the disposal is to a child, this relief is not capped either.
Your son will have a capital acquisitions tax (CAT) liability but two potential reliefs may greatly reduce or eliminate this. If over 25pc of the business is inherited, "business relief" could be available, reducing the taxable value of the gift by 90pc.
This could mean that the "part premises", although owned personally, could be relieved also. If it reduces the taxable value of the gift below the Group A threshold, there may be no liability.
Consanguinity relief can halve the stamp duty on transfers between close family members. For all of the above, punitive clawback conditions exist if it is not properly handled, proving very costly at a later date".
For the second time, my fiancé and I have been rejected for a mortgage. We have saved 10pc as a deposit and while we have a car loan, we are paying it. We were hoping to buy while prices are affordable. Should we just give up?
I'm sorry to hear of your predicament, which is extremely common. At least 30pc of mortgage applications are rejected – many more never even get to the stage of being processed. The main reasons are:
1. Your income levels are not sufficient to maintain the repayments. Is one of you part-time, or in an industry which may be hit by job losses?
2. You are repaying your car loan, but do either of you have a poor credit history? Perhaps a credit card debt or even a late payment? Get your credit report from www.icb.ie for €6 to check what the banks know about this. If it's wrong, get it amended.
3. Existing loans are not attractive to a lender. Consider paying off the car loan as quickly as possible before re-applying.
4. Asking for too much will worry the bank. A bigger deposit would calm them and give you more options. Continue saving in the meantime.
You are entitled to ask for a reason for the mortgage rejection. If you feel it's unfair, the bank should have an appeals process in place. Start with the loan officer on the rejection letter.
On another note, if you chose to buy the type of home for which demand is relatively weak then you may not need to worry about increasing house prices.