Blog – McCarthy & Associates – Galway Talks, 21/08/2014

galway-bayfmQuestion:  Neither of my parents have ever made a will and I know that the family home is still in the name of my Grandfather who is now deceased.  Is this something that needs to be addressed immediately?

Answer:  This is a serious situation and it is important that your parents get legal advice immediately.  If this is not done and they both pass away without doing so, then there will be a legal “quagmire” to be dealt with.

Very often, for some reason, there seems to be a lack of awareness, sometimes in rural areas, about transferring property title within families when somebody dies.  Obviously I am not a Solicitor, but I have come across similar situations in the past and cannot overstate the importance of getting legal advice immediately.

Question:  I want to give a gift to my son and I am wondering does this have an impact on him if I die.  Will he have to pay inheritance tax?

Answer:  It is important to be aware that there is a lifetime limit, which includes both gifts and inheritance, from parent to child of €225,000.  So for example, if you give them a gift now of €50,000 they will be able to inherit or receive future gifts from you up to a maximum of €175,000 before becoming liable for tax.  Above this limit inheritance tax of 33% on the balance applies.

Question:  I am looking to rent a room in my home and I understand there is a tax free allowance for this.  Is this correct?

Answer:  As we have seen recently there has been a considerable upsurge in students looking for ‘Digs’ due to the lack of availability of properties in the rental market.  If you rent out a room in your own home you can earn up to €10,000 p.a. tax free.  I stress it has to be your family home and if the amount exceeds €10,000 then you will be liable for tax on the entire rent you receive.

Question:  I have some shares in Bank of Ireland which I have bought at a much lower price than they are today.  What tax will I pay on any profits I have made and is there any annual tax free allowance on this?

Answer:  It is positive to see that somebody is making money on bank shares!  You are liable for 33% Capital Gains Tax on the profit that you made less an annual allowance of €1,270 per person.