Cash gift - tax liabilities

ninja 12

Hi all ,
I'm looking for some clarifacation about recieving a gift of money ( large sum )

If my wife was to recieve a gift of between 80,000 and 100,000 Euros from her mother ( who lives in Northern Ireland , if it's relevant ) , does she have to declare it or pay tax of some sort on it ?

Also , if her brother was to gift her 25,000 Euros at the same time , the same question applies .

From looking at this page on the Revenue.ie site , it suggests that she would be exempt .

Can anybody confirm this for me .
She's not looking to dodge paying tax , just looking for information about tax liabilities .

Thanks .

Marcusm

If all were in Ireland (and always had been) and there had been no prior gifts or inheritances, you are correct that it would be below the threshold amount; however, the international dimension and any prior items may make a difference.

You'll need to provide some further information to get some comprehensive guidance to cover both Ireland and the UK.

• What citizenship(s) do you and your wife have? Where have you lived/plan to live?
• Where was your wife born?
• Where was her father born?
• How long has her mother been in the UK and what are her plans for the future? Is the UK her natural and permanent home or is she there for some temporary reason?
• Has your wife received any other gifts and inheritances during her life?

ninja 12

Hi ,
I've added the relevant info to your post below-

Marcusm wrote: »

If all were in Ireland (and always had been) and there had been no prior gifts or inheritances, you are correct that it would be below the threshold amount; however, the international dimension and any prior items may make a difference.

You'll need to provide some further information to get some comprehensive guidance to cover both Ireland and the UK.

• What citizenship(s) do you and your wife have? Irish
• Where have you lived/plan to live? Ireland .
• Where was your wife born? Belfast
• Where was her father born? Belfast
• How long has her mother been in the UK and what are her plans for the future? Is the UK her natural and permanent home or is she there for some temporary reason? Belfast born and bred
• Has your wife received any other gifts and inheritances during her life? No

The reason for asking is that an elderly relative of my wife died recently , before updating her will ( it was about 10 years since it was updated )

She had made her wishes known to my wife's mother and brother , but knew that she should have made an up to date will .

My wife's mother and brother will carry out her wishes - dividing her estate fairly between my wife's mother , and my wife , her brother and her sister .

We're just trying to make sure we won't get any nasty surprises from Mr.Taxman

Marcusm

Ah ha, I thought this might turn out to be an interesting one. The reason for the bullet point questions was to identify some issues relating to residence,ordinary residence and domicile. With the amounts involved, there might not be any point but as your wife's family is UK domiciled, there could be a scope for planning to reduce potentil Irish gift tax (technically CAT on gifts). here is probably no real point unless she expects significant future inheritances/gifts.

What is important, however, is the extra information you have provided. There can be no real answer to the Irish CAT questions until there is clarity on the UK will. I imagine that your wife's family may have a solicitor dealing with the relative's estate. If the proposed redistribution of inheritances has been discussed with the solicitor, they may have proposed a deed of family arrangement (not sure how common these are in Ireland but they occur frequently in the UK). Basically, where the beneficiaries under the will want to alter the allocation under the will (whether to change the amounts, %ages or to add new beneficiaries), this will often be done.

If this happens, your wife will be treated for UK inheritance law as inheriting from her relative who may be much more distant than her mother and, if this is respected for Irish CAT purposes (which I would expect it to be), then she would have a much smaller threshold amount. You'll need to check exactly what the relationship is and the means by which the estate is to be divided, i.e. will your M-i-L inherit and then make a gift or will your wife be treated as inheriting.

The one good point is that UK inheritance tax is different from Ireland in that it applies on the estate rather than the beneficiary. This means that whichever route is more beneficial for your wife should be acceptable in the UK.

Make sure you keep on top of this and let the solicitor know; if it screws up the Irish tax position, you'll not be likely to remedy it by suing him!

ninja 12

Hi again ,
Thanks for the detailed reply .

Basically , the original will was -

Cash lump sum left to my wife's brother (£60,000stg).
House and remaining cash / estate left to my wife's mother (sister of the dead relative).



In recent years , my wife's aunt said she wanted to include my wife and her sister in the will but never got aroud to it .

She said she wanted to give my wife enough to clear her/our mortgage and give some cash to my wife's sister , who doesn't have a mortgage .


My mother in Law and my wife's brother agreed to do this for her , and she became too ill to change her will , and recently died .

My wife's brother doesn't want / need the £60,000 , and wants to split it three ways - £20,000 each to himself , my wife and her sister .

Marcusm wrote: »

You'll need to check exactly what the relationship is and the means by which the estate is to be divided, i.e. will your M-i-L inherit and then make a gift or will your wife be treated as inheriting.

My mother in Law will inherit , and make a one off gift of between €80,000 and €100,000 .
This will clear our mortgage and leave us with some cash left over .

The same with the £20,000 from the brother in Law , it will be a cash gift .
The Brother in Law is the executor of the estate .


I hope this all makes sense .

Thanks

Marcusm

ninja 12 wrote: »

Hi again ,
Thanks for the detailed reply .

Basically , the original will was -

Cash lump sum left to my wife's brother (£60,000stg).
House and remaining cash / estate left to my wife's mother (sister of the dead relative).



In recent years , my wife's aunt said she wanted to include my wife and her sister in the will but never got aroud to it .

She said she wanted to give my wife enough to clear her/our mortgage and give some cash to my wife's sister , who doesn't have a mortgage .


My mother in Law and my wife's brother agreed to do this for her , and she became too ill to change her will , and recently died .

My wife's brother doesn't want / need the £60,000 , and wants to split it three ways - £20,000 each to himself , my wife and her sister .





My mother in Law will inherit , and make a one off gift of between €80,000 and €100,000 .
This will clear our mortgage and leave us with some cash left over .

The same with the £20,000 from the brother in Law , it will be a cash gift .
The Brother in Law is the executor of the estate .


I hope this all makes sense .

Thanks

A new gift has arisen - from the brother. It looks as if both will all below the thresholds although perhaps someone with more experience of the aggregation rules could confirm.

If your wife is expecting significant further gifts, she might want to establish whether she has retained her UK domicile of origin or whether she has by choice elected to obtain an Irish domicile as her permanent home.

ninja 12

Marcusm wrote: »

If your wife is expecting significant further gifts, she might want to establish whether she has retained her UK domicile of origin or whether she has by choice elected to obtain an Irish domicile as her permanent home.

There won't be any other cash gifts . She will probably be left something in her mother's will and maybe her brother's as well ( hopefully not for a long time )

So , do we need to inform Revenue about the gifts , or does she just lodge the cheques ?

Thanks .