Parent bailouts to trigger CAT mortgage bill

Defaulting mortgage borrowers will face substantial tax liabilities if their banks invoke parental guarantees to get their money back or minimise losses.

15th May, 2010

Defaulting mortgage borrowers will face substantial tax liabilities if their banks invoke parental guarantees to get their money back or minimise losses.

Revenue has confirmed that parents or other third parties that have guaranteed a borrower’s loans will be deemed to have given them a gift and triggered a corresponding liability to capital acquisitions tax (CAT).

CAT is applied at a rate of 25 per cent of the value of the gift or...

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