One of the things to watch for in a a voluntary transfer of assets: if the transferor is declared bankrupt, the courts can seek to reverse any transfers made in the previous five years.

 

Dear Karen,

My son wants to build a house on my land. He has just obtained planning permission.

I intend gifting the site to him.

What is needed to transfer to the site into his name?

What are the next steps?

 

Dear Reader,

Congratulations!

That is wonderful news, and very exciting for both you and your son.

The first thing that you will need to do is call to your solicitor and instruct him or her of your wishes to transfer the site to your son.

Your son may or may not have his own solicitor at this stage in his life, but if he doesn’t, he will need to instruct another solicitor to act on his behalf.

The same solicitor is prohibited from acting for both sides in conveyancing transactions, despite the fact that you are gifting the site.

Your solicitor will have your title deeds or, if the lands are mortgaged, they will be with your bank, and your solicitor will arrange to take them up from your bank.

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 son will need to be obtained.

Consent of the bank should be applied for as soon as possible, as this may take some time.

A Land Registry-compliant map will need to be prepared, marking the site to be transferred. If any rights of way are needed to allow your son to access the site, or any wayleaves are required to allow your son access a well etc, these will also need to be marked on the map by a suitably qualified engineer.

This is done for the process of subdivision of a folio.

After registration has occurred, the site will have its own stand-alone folio.

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 2% of the market value of the site.

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. Also, the area of the site (exclusive of the area on which the house is to be built) must not exceed one acre.

A voluntary transfer is carried out by a deed of transfer.

A voluntary transfer arises where a person wishes to transfer some of or 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.

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 son will need this declaration when he is putting his 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.

You will need to execute the deed of transfer and then your son will execute it.

Once the deed is executed, your son will own the site, despite the fact that the Land Registry application has not yet been finalised. His application will be assigned a dealing number by the Land Registry. He can proceed to put his mortgage in place, which I will discuss here next week.

 

Karen Walsh, from a farming background, is a solicitor practicing in Walsh & Partners, Solicitors, 17, South Mall, Cork (021-4270200), and author of ‘Farming and the Law’.

Walsh & Partners also specialises in personal injury claims, conveyancing, probate and family law.

Email: info@walshandpartners.ie 

Web: www.walshandpartners.ie 

While every care is taken to ensure accuracy of information contained in this article, solicitor Karen Walsh does not accept responsibility for errors or omissions howsoever arising, and you should seek legal advice in relation to your particular circumstances at the earliest possible time.