Jill Kerby

JC writes from Dublin: My parents are elderly pensioners and are selling a house that has been in my father’s name since it was left to him in the 1950's (He built it with his dad). The house was left to him with the stipulation that his mother would live in it for the duration of her life. She passed away in 2003. This house is, of course, not my parents "principal residence" & has remained unoccupied since 1998, when my Grandmother went into a nursing home. The simple question is, are my parents liable for full CGT on the proceeds? 

“There is CGT relief available where a dependent relative is living in a property that is in your name under the circumstances that your reader describes,” says tax advisor Sandra Gannon of TAB Taxation Services in Dublin. “The house must have been provided free of rent or any other consideration and in this case, what CGT does apply is payable from when the house fell vacant, in this case 1998,” says Gannon. The calculation of the amount of CGT your father will have to pay is complicated:  it depends on when your father received title, the fact that CGT was only introduced in 1974 and the fact that your grandmother’s period of occupancy was be exempt in determining the value of the CGT that applies between 1974 and when the property is actually sold.  Your parents will need to get a valuation of the house back in 1974, and then work out how much of the gain is exempt based on her years of occupancy.  A tax advisor, or your father’s tax inspector should be able to assist. Since April 9th, 2009 the CGT rate has increased to 25%, but your father can offset any expenses involved in the sale of the property against the tax as well as his personal capital gains tax annual allowance of €1,270.

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The period mother left in it it is treated as PPR and he can claim relief until mother left – calculate gain from 98 value in Apirl 6 1974 to 09 when CGT was intro – she lived for 25 year  74 to 09 but actual years of wonership is the period that is discounted

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CR writes from Limerick:  I read in Aine Coffey's Sunday Times article last week that Halifax might pull out of the Irish market. We have a mortgage & some personal savings with Halifax. What will happen to these accounts if Halifax withdraw from the market? Will the mortgage be sold on? If so, we have a tracker mortgage, will we keep the terms & conditions of the tracker mortgage? Will we be able to access our personal savings?

This is all the realm of speculation, but if Halifax or any other bank were to pull out of the Irish market, my understanding is that they would be obliged to honour all existing lending contracts, but do so by providing their customers with on-line or telephone/postal services with which to either access their savings or repay their loans.  It would undoubtedly make requests for information or problem solving less convenient than being able to speak to a branch official directly – no one enjoys the tiresome automatic redirection facilities of home-grown, let along foreign based financial call-centres.  But such an arrangement, a la Northern Rock Ireland and the Leeds and Nationwide building societies, which all take deposits from Irish customers this way, would certainly allow the Halifax to remain here as a deposit taker if they so wished.  Of course they could also just sell their loan and deposit book to a rival UK or Irish bank.  Again, existing lending contracts would need to be honoured, but savings terms, (once fixed rate periods expired) would undoubtedly revert to whatever offers were available from the new institution. 

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DP writes from Dublin: We recently gave birth to our first child and have received many gifts of cash and cheques for him but have been unable to decide on the best option for a bank account for him. Can you please advise as to the best savings account currently available for children either a post office or bank account. I am sure over the coming years he will receive more gifts of cash and I also want an account with which we can teach him the value of saving as he grows older. 

There are plenty of branded children’s savings accounts available – all the main Irish banks and building societies offer them, so does the on-line bank, RaboDirect, though the interest payable on some child-specific accounts can be very low. Some provide moneyboxes and membership certificates, but these are suitable for older children so perhaps you should concentrate on achieving a good return for the lump sum right now and on any regular savings. Top paying demand, internet and notice accounts at the moment are available from the Halifax (3.75%), AIB (3.25%) and Permanent TSB (3.5%) respectively. Anglo Irish Bank offers 3.8% for a 12 month fixed rate and the EBS 3.75% for five months while the best regular savings return are available from Anglo Irish Bank and Bank of Ireland at 5% and the EBS at 4.5%. Deposit rates are expected to come down so you might want to fix your rate.  Make sure you check out post office savings certificate and savings bonds for longer term, tax free savings returns, currently paying 21% over five years and six months and 10% over three years respectively.  Many parents find the local post office a very convenient place for their children to open their first account.