My two siblings, three nieces and I are the beneficiaries of my mother’s will. Part of her estate is a holiday home in Ireland. The other five are happy to share ownership of the house but I am unlikely to use the property so I would prefer to be bought out/realise the value of the asset. I’m proposing we do this now while we have a solicitor working on the probate and the will.
Have you any suggestions as to how best to approach transfer of title and what would be the tax implications on all sides?
From the information provided, your mother died testate: that is to say, she had made a will. In her will she should have named an executor – the personal representative of your mother’s estate on the date of her death. The personal representative is responsible for identifying the assets and liabilities of the estate and thereafter responsible for the administration and distribution of the assets in accordance with the provisions of the will to the beneficiaries.
Part of your mother’s estate vested to the executor is the holiday home in Ireland (“the property”). He/she will have to give assent in writing to transfer the property to the beneficiaries. The Property Registration Authority will need a grant of probate issued to the executor along with the appropriate form of assent. Before the executor can administer the property in accordance with the will, the deceased’s debts, liabilities and testamentary expenses must be paid from the assets in the estate.
Without sight of the specific wording in the will, it is unclear as to how the property was given to you and the other beneficiaries. If the property was given to you and the others as tenants in common, your interest is an undivided share, whatever that may be, whether equal or unequal. If the property was given as a joint tenancy, the property is owned by all of the joint tenants simultaneously and passes by right of survivorship. However, a joint tenancy can be severed by deed of severance.
As a beneficiary of the property, you may elect to disclaim your inheritance, voluntarily release your share to another, or sell your share. As it is not possible to disclaim a share of a joint tenancy, you may elect to release your interest.
Assuming the property has been given to you and the others as tenants in common in equal undivided shares and one of the other beneficiaries is willing to pay for your share, it should be possible to create an arrangement between you and the others by deed. By virtue of the combined operation of the terms of the will and the deed, the executor can assent to the other beneficiary’s interest in the property.
Capital gains
There are tax implications to be considered. No stamp duty is payable on a deed of assent where property is vested from the executor to the person(s) entitled. However, where a beneficiary “pays” for the property, which is what you are suggesting, then the assent becomes a conveyance on sale, and stamp duty in respect of the amount paid may have to be paid depending on the amount of the money passing for the interest.
A transfer of an interest in the property may also give rise to a capital gains tax liability. However, section 573(6) of the Taxes Consolidation Act, 1997, states that there is no capital gains tax liability where a deed of family arrangement is made within two years from the date of death or such longer period as the Revenue may agree in writing.
Finally, the capital acquisitions tax implications should also be considered, especially if other shares in the property are to be transferred between the parties at the same time. You should ask a solicitor about “family arrangements” and the tax implications that may be involved.
William O’Connor is a partner and solicitor with PO’Connor & Son Solicitors, poconsol.ie
