Inheritance tax question

Ritchi

I see that there's a 3k limit on the amount that can be given as a gift per year. Does that mean if you were given a gift of 10k i a year, that all would need to be declared or just 7k?

HcksawJimDuggan

Yes the first €3,000 is ignored for gifts received from each disponer.

Ritchi

Thanks!

scheister

one thing you may wanna be wary about the title is inheritance but the question is about a gift. If the money is received from inheirtance the €3,000 does not apply

Ritchi

scheister wrote: »

one thing you may wanna be wary about the title is inheritance but the question is about a gift. If the money is received from inheirtance the €3,000 does not apply

I'm not sure I understand the difference, is it that inheritance is when they are deceased, and gift when they're alive?

scheister

Ritchi wrote: »

I'm not sure I understand the difference, is it that inheritance is when they are deceased, and gift when they're alive?

Yea you thats the difference.
Revenue can also deemed it inheritance if it was gifted near when they died think its a two year rule (not sure how they apply that part)

Ritchi

scheister wrote: »

Yea you thats the difference.
Revenue can also deemed it inheritance if it was gifted near when they died think its a two year rule (not sure how they apply that part)

So, if given 10k as a gift from a parent, you should pay 33% tax on 7k of it. The inheritance allowance is not relevant?

Ritchi

Ritchi wrote: »

So, if given 10k as a gift from a parent, you should pay 33% tax on 7k of it. The inheritance allowance is not relevant?

You need to speak to an accountant. The limits for Parent to child is in the region of 250,000, sibling to sibling and Uncle/Aunt to Niece/nephew around 30,000 and all others 3,000. An Accountant would be the best one to advise you in order to avoid problems down the line.

exaisle

Deleted User wrote: »

You need to speak to an accountant. The limits for Parent to child is in the region of 250,000, sibling to sibling and Uncle/Aunt to Niece/nephew around 30,000 and all others 3,000. An Accountant would be the best one to advise you in order to avoid problems down the line.

As and from mid October 2015, it's 280,000, 30,145 and 15,075. It was never 3000 for "others".

But you are 100% correct in that the OP needs to speak to an accountant! ;-)

dogsears

scheister wrote: »

Yea you thats the difference.
Revenue can also deemed it inheritance if it was gifted near when they died think its a two year rule (not sure how they apply that part)

The 2 year rule does not apply for the purposes of the €3,000 exemption.

In other words the €3,000 exemption still applies even if the donor dies within 2 years.

There is no particular relevance to the 2 year rule anymore - it used to be relevant when a gift bore CAT at 3/4s of the rate applicable to inheritances.

digzy

can a parent gift a son/daughter 3k per year tax free without affecting the 280k figure in future?

HcksawJimDuggan

Ya - each parent can give €3,000 each (so €6,000 in total) without affecting the €280,000 threshold

Stationmaster

digzy wrote: »

can a parent gift a son/daughter 3k per year tax free without affecting the 280k figure in future?

Yes. For anyone with a lot of cash and who know that they are passing on a lot of it to their children it's a well recommended method of doing so tax efficiently. Can obviously extend to grandchildren, nieces, nephews etc.

Stationmaster

Stationmaster wrote: »

Yes. For anyone with a lot of cash and who know that they are passing on a lot of it to their children it's a well recommended method of doing so tax efficiently. Can obviously extend to grandchildren, nieces, nephews etc.

Also if you are married your parents can jointly gift you are your husband 12k tax free every year without affecting your parent to child threshold. Good tax planning can make a big difference.