Grandparent and school fees

Sod1234

Can a grandparent pay school fees directly to the school or does it qualify as a gift with all the relevant inheritance tax implications?

tenifan

Sod1234 wrote: »

Can a grandparent pay school fees directly to the school or does it qualify as a gift with all the relevant inheritance tax implications?

How much money are we talking?

Unless the child already received considerable inheritance or gifts (€33,500) then they won't have to worry about gift tax. See http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html

Also worth noting, any 3rd level fees you pay are tax deductible at 20%.. anything over €2k, max €7k, excluding registration, admin or exam fees.

Sod1234

tenifan wrote: »

How much money are we talking?

Unless the child already received considerable inheritance or gifts (€33,500) then they won't have to worry about gift tax. See

Also worth noting, any 3rd level fees you pay are tax deductible at 20%.. anything over €2k, max €7k, excluding registration, admin or exam fees.

Thanks for quick reply. Suppose it would just be the accumulation, ie secondary school fees at 5k plus college fees, even subtracting the small 3k exemption, it could get close to 33k pretty quickly. Was just wondering if school fees were an understood exemption....

Alan Shore

On the basis that they child would not in most cases be paying the fees certainly at 2nd level, it could be argued that it's a gift to the parent.

Remember that it's €3,000 per grandparent.

tenifan

Not an expert on it but I wouldn't have thought so.
Would revenue really go sniffing around fees paid to schools?
Also, it would be the grandchild's responsibility down the line if they were lucky enough to get even more gifts.

Another thing to consider, is you could gift the money to a parent. Assuming they have not/ will not have received a large inheritance or gift, their payment of school fees would be exempt.

Ideo

Somebody else might confirm, but just to add, doesn't a granchild assume a parents threshold if the parent is deceased? So grandparent to grandchild is treated like grandparent to parent?

tenifan

Ideo wrote: »

Somebody else might confirm, but just to add, doesn't a granchild assume a parents threshold if the parent is deceased? So grandparent to grandchild is treated like grandparent to parent?

Yes

barneystinson

A grandparent acting in loco parentis in providing for their grandchildren will not be seen as making taxable gifts.

A rich grandparent stumping up the dough for little Johnny to go to Clongowes and then covering a jaunt to Uni, while there are parents (and a State) perfectly well able to provide for them, is a different proposition.

CIARAN_BOYLE

Sod1234 wrote: »

Thanks for quick reply. Suppose it would just be the accumulation, ie secondary school fees at 5k plus college fees, even subtracting the small 3k exemption, it could get close to 33k pretty quickly. Was just wondering if school fees were an understood exemption....

Remember its 3K per year

mozattack

€3k per year per person so two grandparents and you have €6k per annum

Sod1234

Alan Shore wrote: »

On the basis that they child would not in most cases be paying the fees certainly at 2nd level, it could be argued that it's a gift to the parent.

Remember that it's €3,000 per grandparent.

Although the same could be said about most non-cash gifts to children. It's certainly not an obligation of the parent so one might say it's an optional expense that the grandparent would like to facilitate, same as say tennis lessons or a trip away.

namenotavailablE

s82 of CATA 2003 sets out the exemption criteria for 'education, support and maintenance' type gifts/ inheritances.