Could be good time to gift a site but keep it legal and above board
The Solicitors (Professional Practice, Conduct and Discipline, Conveyancing Conflict of Interest) Regulation 2012 which came into force on the 1st January, 2013 prohibits solicitors from acting on both sides of any conveyancing transaction.
It is now essential that both sides be independently advised, albeit that it is a voluntary gift. You will need to instruct your solicitor, and so will your daughter.
Your solicitor will hold the title deeds to your property.
If the property is mortgaged, your bank will hold the title deeds.
If the property is mortgaged it will be necessary to obtain the written consent of the bank to the transfer.
A release by the bank of their charge over the site to be gifted to your daughter will need to be obtained.
A voluntary transfer is carried out by a Deed of Transfer.
A voluntary transfer arises where a person wishes to transfer some of all of their property, usually to a close family member during their lifetime.
If the property is in the joint names of you and your spouse, it will be necessary for both to sign the Deed of Transfer.
An auctioneer will need to be instructed to value the site for stamp duty purposes.
In the case of non-residential property, stamp duty is payable at half the normal rate applicable if there is a transfer of property to certain relatives — for example, a parent, grandparent, step-parent, child, brother, sister, half-brother, half-sister, aunt, uncle, niece or nephew.
This consanguinity relief will cease after December 31, 2014. The stamp duty payable will be 1% of the market value of the site. This rate will apply if the Deed of Transfer is executed prior to January 1, 2015. On January 1, 2015, consanguinity relief will be abolished, and the stamp duty rate will increase to 2%.
An engineer will need to be instructed to mark the site on a map suitable to Land Registry mapping requirements.
If your daughter requires a right of way to gain access to the site or a wayleave to gain access to a well on your land etc. a Deed of Right of Way or Deed of Wayleave will also have to be drawn up and executed.
Assets can only be transferred when you are solvent.
You will need to sign a Declaration of Solvency confirming that you are capable of paying your debts and liabilities and not attempting to defeat creditors.
Your daughter will need this declaration when she is putting her mortgage in place.
If a person that has transferred property is declared bankrupt the courts can seek to reverse any transfers made in the previous five years.
Finally, Capital Gains Tax is a tax on gains arising on the disposal of assets and is payable by the transferor.
At present, there is an exemption if you transfer a site to a child to enable that child construct a principal private residence on the site, provided the market value of the site does not exceed €500,000.
The area of the site (exclusive of the area on which the house is to be built) must also not exceed one acre.
