House inheritance issues

alienhead

ok, here goes...

my father, widdower, ownes his own house, outright, i'd say it's valued at around €550,000, prety indipendent, but getting on in years.

my brother, who lives on the outskirts of dublin with his gf, is suggesting buying da's house, and building a granny flat that he(father) can live in.

this sounds like a prety good idea, although he suggested he'd prob get the house alot cheaper than market value, around 100k, plus, what about the aditional building, will they own that too (which i'm sure would be payed for by father)

i hate having to think about this, as it's not a v nice topic of discussion, but there's 5 siblings, and i'm just thinking, why should one inherite the house. it's not somthing i'd do, i always assumed each kid got an equal share of the ineritance.

am i wrong here? is this the norm?

i don't wanna come accross as being greedy, i just feel a bit miffed that it was mentioned so mater of factly.

does anyone have any experience with this?

i'd appriciate serious replies.

latenia

The only 'automatic' right to inheritance would be to a spouse. After this is it's entirely up to the person making the will. The only financial/legal issues here are tax ones for your brother as he is getting the house below market value from a family member, and for whoever gets the proceeds of the house sale in the will, following your father's death.

The 'favouritism' shown to your brother here is pretty common and a huge source of conflict in families, so you shouldn't feel that your resentment is unique. It's probably best to let it go and respect your father's wishes, unless you want to start a row amongst your siblings that will probaly go on until your own death.

Victor

I suggest putting you father in touch with a solicitor. First chat is often free.

Idleater

alienhead wrote:

....though he suggested he'd prob get the house alot cheaper than market value, around 100k...

I am not sure that this can be done with quite the amount of freedom that is wished.

If the house is sold at a "value" of say, ~€100k, but the "REAL Market value" is ~€550k then he will be liable for capital gains tax on the actual value ~€450k.

One way of reducing the cost to the son would be in the saving of Auctioneer's fees and probably Solicitor's fees, after that, you are at the mercy of the Revenue and the loopholes that can be found therin.

L.

FillSpectre

You simply won't get away with selling the house that much cheaper to the brother. THe taxman investigate sales between family memebers and compare local market prices. YOu get Satmp duty breaks by selling to immediate family and save on the auctioners. You might be able to sell a little cheaper but no where near 100k.

If your brother is talking about building the property for your father after the purchase and then taking care of your father it is fair he gets something. I am sure building a granny flat will have costs. As he will own the house he is not inheriting it. If he is getting a 100K off then the other family mameber sshould also revice a gift from your father of similar amounts to be fair but who says life is fair.

alienhead

FillSpectre wrote:

You simply won't get away with selling the house that much cheaper to the brother. THe taxman investigate sales between family memebers and compare local market prices. YOu get Satmp duty breaks by selling to immediate family and save on the auctioners. You might be able to sell a little cheaper but no where near 100k.

If your brother is talking about building the property for your father after the purchase and then taking care of your father it is fair he gets something. I am sure building a granny flat will have costs. As he will own the house he is not inheriting it. If he is getting a 100K off then the other family mameber sshould also revice a gift from your father of similar amounts to be fair but who says life is fair.

ye, i hear ye, this wouldn't be fair, and yes, life aint fair, but it's this kind of stuff that causes big problems with familys.

it's somthing i wouldn't do, for that simple reason.

i knew there would be capital gains tax if you inherit a house, but didn't realise this applies if the house is sold at a much lower price than market value.

would you have more info on this? or links to relevant sites, not exactly what to search for in google.

ta

FillSpectre

alienhead wrote:

ye, i hear ye, this wouldn't be fair, and yes, life aint fair, but it's this kind of stuff that causes big problems with familys.

it's somthing i wouldn't do, for that simple reason.

i knew there would be capital gains tax if you inherit a house, but didn't realise this applies if the house is sold at a much lower price than market value.

would you have more info on this? or links to relevant sites, not exactly what to search for in google.

ta

I agree this is stuff that casues family trouble. I am not saying you should let it be either quite the opposite. Your brother does not get 100k for free is the way look at it. If you however think your brother will earn this 100k by taking care of your family state so clearly, if you think it is too much agree on an amount.

it Is inheritance tax you pay on inheritance CGT is completley different.

http://www.oasis.gov.ie/

Is a good site. The problem is you need to know what you are looking for.

You need inheritance and stamp duty information at least.

Your father is likely entitled to many of the home imporvemnt grants as an OAP. It is probably worth checking these out before selling to your brother. Your dad might not need to downsize. Stair rails,house alarm, specialised bathroom etc... are entitlements he may have or at least reduced costs.

It may be worth your father looking at a SHIP scheme but I personally think they are only suited to elderly people without immediate family

Beruthiel

alienhead wrote:

my brother, who lives on the outskirts of dublin with his gf, is suggesting buying da's house, and building a granny flat that he(father) can live in.

sounds like a good idea, however, has your Da actually agreed to this? you haven't said.
your Da would feel a lot safer having someone so close and your brother would seem to be taking on the looking after your Da, not something everyone can or is willing to do.

i hate having to think about this, as it's not a v nice topic of discussion, but there's 5 siblings, and i'm just thinking, why should one inherite the house. it's not somthing i'd do, i always assumed each kid got an equal share of the ineritance..

you assume wrong.
My parents have four daughters, 3 of us have made a good start in life and can take care of ourselves.
The third will be getting the family house, she needs it more than the rest of us and the house had been in my family for generations, my mother does not want to see it leave the family.
None of us have a problem with this.
Our parents owe us nothing at this stage, they've brought us up, we can take care of ourselves, their job is done.
I have already told my daughter that if I found out I had only six months to live that I'd sell up everything and party till I dropped.
I don't believe a parent owes a child anything after they reach a certain age, it's up to them to look after themselves.

I would expect that if your brother is getting the house @ 100k cheaper then he should also be paying for the granny flat as part of the package, that would seem fair to me.
It also seems that if he is buying the house then he isn't exactly inheriting it, your Da will have the money for it to make sure the rest of his life is comfortable.

alienhead

FillSpectre wrote:

I agree this is stuff that casues family trouble. I am not saying you should let it be either quite the opposite. Your brother does not get 100k for free is the way look at it. If you however think your brother will earn this 100k by taking care of your family state so clearly, if you think it is too much agree on an amount.

it Is inheritance tax you pay on inheritance CGT is completley different.

http://www.oasis.gov.ie/

Is a good site. The problem is you need to know what you are looking for.

You need inheritance and stamp duty information at least.

Your father is likely entitled to many of the home imporvemnt grants as an OAP. It is probably worth checking these out before selling to your brother. Your dad might not need to downsize. Stair rails,house alarm, specialised bathroom etc... are entitlements he may have or at least reduced costs.

It may be worth your father looking at a SHIP scheme but I personally think they are only suited to elderly people without immediate family

thanks for advice

alienhead

Beruthiel wrote:

sounds like a good idea, however, has your Da actually agreed to this? you haven't said.
your Da would feel a lot safer having someone so close and your brother would seem to be taking on the looking after your Da, not something everyone can or is willing to do.



you assume wrong.

don't you mean, in your opinion i assume wrong?

My parents have four daughters, 3 of us have made a good start in life and can take care of ourselves.
The third will be getting the family house, she needs it more than the rest of us and the house had been in my family for generations, my mother does not want to see it leave the family.
None of us have a problem with this.

i would see this as being the exception to the rule, but if the rest of us were much better off, and a sibling was realy strugling, with a family, i can see this aplying.

this is not the case though, i've no doubt that my brother would be able to afford a better house in a couple of years

Our parents owe us nothing at this stage, they've brought us up, we can take care of ourselves, their job is done.
I have already told my daughter that if I found out I had only six months to live that I'd sell up everything and party till I dropped.
I don't believe a parent owes a child anything after they reach a certain age, it's up to them to look after themselves.

yes, they owe us absolutly nothing, they can sell up and blow it all in vegas if they like, but most prefer to leave their assets to their children, of course, after they've looked after themselves financially

I would expect that if your brother is getting the house @ 100k cheaper then he should also be paying for the granny flat as part of the package, that would seem fair to me.
It also seems that if he is buying the house then he isn't exactly inheriting it, your Da will have the money for it to make sure the rest of his life is comfortable.

i'm not sure, this hasn't been discussed, just looking for advice that's fair to all concerned

...............

semidefinite

Beruthiel wrote:

Our parents owe us nothing at this stage, they've brought us up, we can take care of ourselves, their job is done.
I have already told my daughter that if I found out I had only six months to live that I'd sell up everything and party till I dropped.
I don't believe a parent owes a child anything after they reach a certain age, it's up to them to look after themselves

I certainly agree with your sentiments that a parent should not be obliged to spend their lives supporting their children. However, you admit yourself that you have been successful in life and are in no need of your parents' assistance. I assume that you own one or more properties, or are at least in no danger of being without accommodation. However, for many people this is not the case. The difficulties faced by first-time buyers, who do not have parental help to secure a mortgage or deposit, are all too familiar. In your case, you say that only one sibling needs the family house. But if several members of your family had needed financial help, would you have considered it fair if help had only been given to one of them?

In general, it seems that inheritance issues are a minefield in family life. Disinheriting one sibling to favour another is often a recipe for disaster. However, on the other hand, if the OP's brother is genuinely interested in taking care of their father, than this should certainly be taken into consideration. Personally, I have great respect for people who are prepared to take care of their elderly relatives. Unfortunately, it is often the case that years of care are not valued when it comes to dividing up an estate.

With regard to the OP, as many posters have noted, selling a house for well below the market value in order to avoid inheritance tax is not something that people can get away with these days. It seems like you all may need to examine the legal ramifications of any move before your father comes to a decision.

alienhead

semidefinite wrote:

I certainly agree with your sentiments that a parent should not be obliged to spend their lives supporting their children. However, you admit yourself that you have been successful in life and are in no need of your parents' assistance. I assume that you own one or more properties, or are at least in no danger of being without accommodation. However, for many people this is not the case. The difficulties faced by first-time buyers, who do not have parental help to secure a mortgage or deposit, are all too familiar. In your case, you say that only one sibling needs the family house. But if several members of your family had needed financial help, would you have considered it fair if help had only been given to one of them?

i would say we are all pretty much financialy the same in relation to our ages.

In general, it seems that inheritance issues are a minefield in family life. Disinheriting one sibling to favour another is often a recipe for disaster. However, on the other hand, if the OP's brother is genuinely interested in taking care of their father, than this should certainly be taken into consideration. Personally, I have great respect for people who are prepared to take care of their elderly relatives. Unfortunately, it is often the case that years of care are not valued when it comes to dividing up an estate.

this is true, but the issue of care is not one that will come up for at least 15 years, hopefully anyway, but yes this is somthing that needs to be discussed, i just didn't think it would be on the table so soon

With regard to the OP, as many posters have noted, selling a house for well below the market value in order to avoid inheritance tax is not something that people can get away with these days. It seems like you all may need to examine the legal ramifications of any move before your father comes to a decision.

ye, i don't think he's aware of the tax implications, of which i'm only learning, this needs to be look into, yes

........

semidefinite

Hi Alienhead. If it is the case that your financial circumstances are similar and your father is not in need of special care, then it would seem a little unfair if one of you was to substantially benefit at the other's (or your father's) expense. However, these things are never as straight-forward as they seem. You should probably discuss your concerns with your father, as his security and happiness should be paramount in all of this. After that, he should probably speak to a solicitor, who can make him familiar with the legal aspects of the situation.

Hopefully this matter won't cause problems for your family. Best of luck.

alienhead

semidefinite wrote:

Hi Alienhead. If it is the case that your financial circumstances are similar and your father is not in need of special care, then it would seem a little unfair if one of you was to substantially benefit at the other's (or your father's) expense. However, these things are never as straight-forward as they seem. You should probably discuss your concerns with your father, as his security and happiness should be paramount in all of this. After that, he should probably speak to a solicitor, who can make him familiar with the legal aspects of the situation.

Hopefully this matter won't cause problems for your family. Best of luck.

yes, this is the case, father's got years left in him, it would be my father who would be out of pocket.

thanks for advice, hopefully we'll be able to sort somthing out