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Deed of covenant - explanation?

  • 04-06-2016 6:30am
    #1
    yqtwqxqm
    Registered Users, Registered Users 2 Posts: 422 ✭✭


    Hi,
    I am on the high tax rate and would like to pay money to a 79 year old parent every month.
    I have been reading about setting up a deed of covenant which would allow me to get 41% of this money back through the tax system.
    Im finding it very confusing.
    Can anyone simplify it for me.

    I want to pay €200 per month to my Dad using this method.
    How would I set it up and how does it work?

    Do I just set up a DD for €200 per month and then get €80 off my tax bil every month?

    Thanks.


Comments

  • #2
    Pawwed Rig
    Registered Users, Registered Users 2 Posts: 22,435 ✭✭✭✭Pawwed Rig


    There has to be a contract drawn up and you need to meet very strict criteria.
    I am on mobile at the moment so can't get too technical but if you log onto revenue.ie and search for IT7 you will see a good bit of info.

    You save USC too :)

    I am actually setting up 2 at the moment. It is a great relief that is under utilised.


  • #3
    yqtwqxqm
    Registered Users, Registered Users 2 Posts: 422 ✭✭yqtwqxqm


    Pawwed Rig wrote: »
    There has to be a contract drawn up and you need to meet very strict criteria.
    I am on mobile at the moment so can't get too technical but if you log onto revenue.ie and search for IT7 you will see a good bit of info.

    You save USC too :)

    I am actually setting up 2 at the moment. It is a great relief that is under utilised.

    Thats great.
    I'll look it up
    Thanks


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