"gift"

Martron

if i was given 50,000 as a gift. what tax am i liable to pay. what is it called? and is there any restrictions on what i can use the money for.

as in can i use that money to start a business?

Thoie

It's gift tax, and it depends on who gave you the money.

This might help - http://www.revenue.ie/en/tax/cat/leaflets/cat1.html

Martron

so if an uncle was to give me 50k cash i would not have to pay any tax?

Thoie

So it seems, but if another uncle/granny/sister gave you €3,000 in 5 years time, you'd then start owing tax.

Martron

that probably wont be an issue.

what defines it as a gift?

do i have to prove it was my birthday or something. and how do they know i recieve a gift. or is it just honesty?

Legend100

when did you get the gift?

The emergency budget brought down the group thresholds which might drag you into a CAT liability

Thoie

Martron wrote: »

that probably wont be an issue.

what defines it as a gift?

do i have to prove it was my birthday or something. and how do they know i recieve a gift. or is it just honesty?

I think it's a gift purely because it was given to you, and you didn't give anything in return - you didn't "earn" it in the traditional sense.

If I get up every morning, go to an office, do some work, get paid every month, etc. etc. then I've earned the money from a 3rd party in return for services.

If I get up every morning, look after my granny, do everything for her and then at some stage she gives me a bundle of cash, that's a gift rather than an income even though the work might be as hard, if not harder. I think the difference comes in the expectation. In an office I expect to exchange 40 hours of work for cash. I might look after my granny with no expectation of a monetary renumeration. Similarly, your uncle might just have happened to find €50k lying around, and decided to give it to you because he likes you - he didn't expect you to do anything in return for it.

They know it's a gift mostly through honesty - if it was over the limit you're expected to declare it. The way they find out is through things like examining the DIRT records at the end of the year, or randomly picking you for a tax audit, or if you were claiming means tested social welfare, and then suddenly opened your own business with all this cash that wasn't there a few months ago. While it would be fairly random if the Revenue found out, it's easier to declare these things up front, as you could get in a lot of trouble if you were found to be evading tax (which it doesn't look like you are).

If you are starting your own business, you'll need an accountant, and it would certainly be worth asking the accountant about your tax liability on the €50k while you're paying him anyway. Given that the latest budget has changed some things, don't rely purely on my (non-accountant) advice. You can always just call the Revenue, tell them that your uncle is planning on giving you the cash, and ask what the situation is. An accountant might also be able to tell you better ways to do things, for example, what if your uncle doesn't give you the cash, but gives the money to your new company, becoming an investor?

Martron

would the tax rates be different for that? as in giving me the money for an investment?

roughly how much is an accountant? how would i go about getting one?

is there any where i can get free financial advice? ha ha or is that asking too much?

Thoie

Martron wrote: »

would the tax rates be different for that? as in giving me the money for an investment?

I'm really really not an accountant, so this is all based on supposition, but you might find that if he invests the money (in your company), that he'd then pay tax on the dividends (ie, money you'd give back to him from time to time).

roughly how much is an accountant? how would i go about getting one?

Not a clue, but I'd imagine an initial discussion would be a couple of hundred. And the Golden Pages or recommendations from friends is your best bet to find one.

is there any where i can get free financial advice? ha ha or is that asking too much?

Yes - that's asking too much (particularly when you tell them you've got €50k!)

You might want to start out reading all the info here (and all the stuff linked from there, particularly the bits in further information). There is also an Entrepreneurial forum somewhere here on boards who may be able to offer advice.