Blog – McCarthy & Associates – Galway Talks, 05/02/2015

loan applicationQuestion: I am considering helping my son with regard to a deposit for a house. Are there any tax implications for both of us if I do this?
Answer: There is a lifetime threshold of €225,000 which covers both inheritance and gifts from parent to child. So for example, if you have never gifted any monies to your son and the total amount is less than €225,000 then he won’t have any tax to pay on the money you give him.
It is important to remember however, that he is aware that this part of the lifetime threshold, in other words if you gift him €50,000 and he receives no further gifts from you during your lifetime and his inheritance has a value of more than €175,000 then he will pay Capital Acquisitions Tax (33%) on the balance.

Question: Do you think it would be easier to move your mortgage between lenders this year?
Answer: It certainly will be easier to move from one lender to another this year, as the banks are not lending the level of mortgages that they need to, for house purchase. The only other market for mortgage business is to encourage those who are strong enough to move from one institution to the other.
The lending criteria however is still going to be very strict and unfortunately it is likely that many of those who wish to switch lenders may not meet the conditions, depending on their circumstances.

Question: I am getting a loan from my bank for a property and I feel they are putting me under pressure with regard to taking out life cover with them. Can they do this?
Answer: No, they are not allowed to do this. If you are obtaining a loan from a bank, they cannot make it conditional, whether implied or otherwise, on you taking out another product with them. You can also shop around for this life cover and as long as it meets the minimum requirement that the bank lays down in your mortgage sanction, then they must accept it.
The worry that I always have is that banks have a tendency to try and sell clients products for life cover which may be unaffordable for them.

Question: My mother is in her 70’s and has some money on deposit which she needs to be able to have access to. The problem is it is earning less than 1%. Is there any alternative suitable for her?
Answer: Unfortunately you are in a predicament because, whilst leaving monies on deposit is going to earn her very little, it appears that you have no choice to do so. This is due to the fact, that she needs access to the monies (also her age) and is therefore unsuitable to invest in any investment product.