My daughter has been living at home all her life with me, her mother. I worked hard and my mortgage is paid and I have the house deeds. She is my only child. I was never married. I am now 70 and fear, if I die, she may have to pay for staying in her home. She is unemployed. I have never made a will.
What is my position and does the house go into her name after I die without her having to pay tax to continue living there? I would appreciate your help on this. It is a big worry for me.
Ms E.M., email
The first and most important thing I can advise you is to make a will – now, without delay.
It does not have to be complex or extortionately expensive. For most of us, a will leaving our worldly goods to a spouse/partner or, in their absence, to children or even friends can be a very simple document – a one-pager even.
It is certainly advisable to get a solicitor involved because you want to make sure that the wording is legally watertight and not open to misinterpretation or legal challenge.
This doesn’t have to be expensive. Just note down exactly whom you want to inherit what and, ideally, appoint an executor – a person to manage your estate when you die. The executor can also be the person benefitting from the estate. The solicitor will draw up the will and arrange to have it witnessed. Witnesses cannot inherit under the will.
There is absolutely nothing to stop your daughter inheriting your home without paying any inheritance tax as long as she owns no other property – or a share in any other property. She can avail of what is called the dwelling house exemption.
Following the closing of a loophole in the Finance Bill, which is currently going through the Oireachtas, if your daughter inherits any other physical property – and here I mean a house or apartment, and not jewellery, for instance – from you as part of your will, it will leave her liable to inheritance tax.
The other criteria are that the home you are leaving her should be your main home and that she should have lived with you there for three years before you die. Both of these are clearly met.
Clawback of tax
She will have to live there for at least six years after you die or she shall face a clawback of tax from the Revenue. She can sell your home in that time but must use all the money it fetches to buy another home.
The only slight uncertainty I have is what happens if you die intestate – without a will. I can’t find any mention of whether that would disqualify your daughter from benefiting from this exemption. I doubt it but, just to be on the safe side and away form any possible complication, go get that will made now, this month.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email firstname.lastname@example.org. This column is a reader service and is not intended to replace professional advice.