The Money Doctor: Mum wants to swap houses
Q My widowed mother lives in a four-bed detached house, which is valued at €600,000, and I live with my husband and three children in a two-bed townhouse. I'm an only child and my mother has suggested we swap houses. What are the tax and inheritance implications?
A This depends on whether your mother wants to permanently gift you her home or if it is just a straight swap. There are no siblings involved, so you won't have to work out an equitable solution on their inheritance. As regards inheritance, as a daughter, you are eligible to receive tax-free from your mother €414,799 currently, over which you pay 25pc capital acquisition tax. You would also have to pay stamp duty if the property were to be put in your name but only half the normal rate as it is mother to daughter (7pc normally, so just 3.5pc over €125,000).
One solution that could save you money would be to move into your mother's home, letting her remain and keeping the home in her name. When she passes on, as long as you have been living in the home and you have no other property -- you would have to sell the present home -- your mother's home would not be included in her estate for tax purposes. You would also have to continue living in your mother's home for another six years.
Finally, the value of the mother's property may be needed in the future to pay for home-help or nursing-home care, so make sure you air all these issues before deciding even to do a straight swap.
Best six months deposit
Q I was made redundant and have €42,000 to put on deposit. I have nothing planned at this moment but may use the money in about six months to start my own business. Where are the safest and best rates? Peter, Castleknock
A Safety and best rates -- that's the order in which you should be thinking. There are two State-owned institutions (An Post and Anglo Irish Bank) and all the Irish deposit takers are guaranteed to the end of this year. Even after that, the former guarantee of €100,000 per customer is still valid and in place.
The latest product offering from EBS -- a five-month fixed account -- might suit you down to the ground. They offer 3.6pc or 3.64pc which is the Annual Equivalent Rate.