Parents paying for a child's wedding tax-free

WexTK

Hi all,

with Inheritance tax in the news of late I found it interesting to hear that parent's can pay for their child's wedding gift tax free.

I was wondering whether this tax exemption still applies if the parent only part pays for the wedding, i.e. just the reception cost for instance.

In addition can the parents also give the child a small gift exemption of €3000 individually in the same year of the wedding?

Kind regards.

adrianw

not sure where you read that but it is incorrect. it is not exempt and never has been.

There are certain expenses - cost of maintenance and education that are exempt but paying for a wedding would be a gift and subject to gift tax.

Perhaps, it is an area which Revenue regularly overlook but that is due to the fact it is so common and trying to tax it would be very difficult.

Alan Shore

I think that a parent paying for a wedding is specifically exempt from CAT. See paragraph 5 http://www.revenue.ie/en/tax/cat/leaflets/cat-treatment-receipts-by-children.pdf

adrianw

Alan Shore wrote: »

I think that a parent paying for a wedding is specifically exempt from CAT. See paragraph 5 http://www.revenue.ie/en/tax/cat/leaflets/cat-treatment-receipts-by-children.pdf

Thank you Alan. I was unaware of that.

maggiepip

But you can gift your children up to 225,000 tax free. Anything over that amount is taxed.

johnb25

maggiepip wrote: »

But you can gift your children up to 225,000 tax free. Anything over that amount is taxed.

What is the relevance of the 3K exemption if the tax free threshold is 225k?
Are there cases where only the 3K applies to gifts to children?

This is the case I am looking at:
Deceased parent leaves entire estate to spouse.
Surviving spouse wants to give some cash (maybe 5K each) to children.
Which limit applies? Any tax implication?


Thanks.

John

maggiepip

johnb25 wrote: »

What is the relevance of the 3K exemption if the tax free threshold is 225k?
Are there cases where only the 3K applies to gifts to children?

This is the case I am looking at:
Deceased parent leaves entire estate to spouse.
Surviving spouse wants to give some cash (maybe 5K each) to children.
Which limit applies? Any tax implication?


Thanks.

John

Its 225,000 amount in total tax free, but its accumulative. Any gift under 3k (I think per year) is exempt, but anything over that should be kept record of .

So for example if a parent gives a child 5 gifts of 10,000 during their living years, this is equal to 50,000 in total.Parent dies and child inherits estate, their tax free threshold should be minus the 50,000 already received. So child can now only inherit 175,000 tax free.

If you give a gift of 5,000, 3000 is exempt and 2000 should be subtracted off the 225,000 tax free amount, so now the child can inherit up to 223,000 tax free. How this is all kept track of Im not sure.

Edit: should have minused 3000 off each of the 10,000 gifts example too, if given per year