With rising income and wealth in Ireland and the fact that families tend to be smaller than historically, the parent-to-child Class A threshold can easily be used up. Dwellinghouse relief is an important relief in that context if all the criteria can be met. To meet the relief on an inheritance the following are the qualifying conditions, namely

• The house was the main home of the person who died

• the donee lived in the house for three years before the date of death

• the donee does not own or have an interest in any other house

• the donee does not acquire an interest in any other house from the same disponer between the date of inheritance and the valuation date

• The house is the main home of the donee for six years after the inheritance date.

Today’s note is a short note on the criteria “the donee does not own or have an interest in any other house”. In connection with this aspect, some points to note:-

Territoriality

There is no territorial restriction on owning another house. So if the donee has a property abroad, then the donee cannot qualify for the relief.

Interest

The donee cannot have an interest in any other house. So even if the donee is a partial owner of another house, then the donee will not qualify. So the donee could own a one-sixth share as a tenant in common of another house and as a result be disqualified from the relief. Further, the donee could be just starting out buying a house and have limited equity in another house that might be subject to a mortgage. That would still constitute an interest in another house.

House

It should be noted that the donee can have an interest in other property. So the donee may own or have an investment in a commercial property/farmland. This doesn’t disqualify the donee.

Other house

Further, the restriction regarding ownership only pertains to another house. So the donee could be a joint owner of the house that they are getting under dwellinghouse relief and they will still have the benefit of the relief. Further, the donee could have made contributions towards the house that they are living in (such as paying for repairs or building an extension out of their own funds) which could give rise to a constructive or resulting trust in their favour. This also doesn’t disqualify the donee from availing of the relief.

These are just some points that I have come across in practice on this relief over the past number of months that practitioners might find of use.

Remember if you have any probate, will drafting or capacity issues that you need assistance on please do not hesitate to reach out to me through the website or on ckelly@hcalaw.ie. Colm Kelly