Yes,i know,rather a dramatic statement.However two board members ( down at the pub of course ) where explaining the advantages here in Cyprus of giving your home to your child/children before your meeting with the grim reaper.Another board member said there where no advantages to this dramatic move.Due to the amount of refreshments that had been consumed during this debate by all members i got rather confused on the subject.
Bearing in mind that you and your spouse whilst getting on in years are still healthy,and your child/children are resident on the island is there an advantage in doing this?
Giving your house away?
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Re: Giving your house away?
My understanding is that there is no inheritance tax per se in Cyprus, but there is a 'transfer fee' to be paid to the state of between 4 and 8%, which depends on the deceased's relationship to the beneficiaries. I suppose gifting property would avoid this fee, but there are also fees and taxes involved in transferring ownership. According to this site, 'The fees payable vary depending on the kind of transfer and are determined based on the assessed value, or on the market value of the property under transfer'. It's very difficult to say which method would incur fewer costs.
PS: If anyone wants to give me a house, it would be gratefully received!
PS: If anyone wants to give me a house, it would be gratefully received!
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Re: Giving your house away?
Problem with giving your house to a sibling. If they are married and get divorced, the house might become part of the divorce proceedings and you could lose at least half of it. Legal advice would need to be sought. Maybe setting up a trust would be a better option.
Re: Giving your house away?
It also depends on where the beneficiaries reside. In my case, I transferred the property in equal parts to my daughter and my two grandchildren in Switzerland, with a legally binding condition that I and my late wife occupied and benefited from it until we are both dead, under Cypriot law. This was done at a time when the idea of introducing death duties here was being considered. The value of the property was such that one third for each legatee would not involve much property tax in Switzerland.
Re: Giving your house away?
Going through the Trust Route right now, should any beneficiary siblings divorce,it will not be included in any settlement...
Re: Giving your house away?
daveg,Thats very interesting,thanks.So are you saying that should you transfer your house in a trust leaving it to your son or daughter,in the event of them getting a divorce the property would not be part of the divorce settlement.Or have i over simplified matters.Oh, assuming the property is here on the island.
Re: Giving your house away?
Chaddy, you are correct and yes this relates to a property in Cyprus.
We decided to go this route as it will not be necessary for the surviving partner to go through the tortuous probate process here ..plus when both partners pass on it makes it far easier for the named beneficiaries,who are probably back in the UK,to deal with the property as they wish....
We decided to go this route as it will not be necessary for the surviving partner to go through the tortuous probate process here ..plus when both partners pass on it makes it far easier for the named beneficiaries,who are probably back in the UK,to deal with the property as they wish....
Re: Giving your house away?
If I remember correctly, I think I paid €2000 for a one-time mandate dividing the property between the potential beneficiaries in vivo. As the will has been deposited, only the probate costs will be charged after I kick the bucket.
Re: Giving your house away?
Trust cost is around the same as probate cost plus a yearly cost to keep it up to date, as required by the Cy authorities...circa €300 ...