Sending 5k to a friend by bank transfer

ibrahimovic

I have googled this but am more confused than I started. If i sent 5k euro to a friend in Ireland as a gift by bank transfer does he or I have to pay any tax? I'm in Ireland too.Thanks!

Victor

If it is their first such gift, no.

If they have had many such gifts, the recipient may have a CAT liability. http://www.revenue.ie/en/tax/cat/ - pay particular attention to the Thresholds, Rates and Aggregation Rules.

ibrahimovic

oh thanks, so I can send €16,250 a year? I thought it might have been 3k. This stuff is way too confusing.

laotg

Just pay him cash. No paper trail and no tax.

punisher5112

This thing always amazes me because how do they know for example you don't owe them it or its payment for a car or bike let's say...

Taxuser1

ibrahimovic wrote: »

oh thanks, so I can send €16,250 a year? I thought it might have been 3k. This stuff is way too confusing.

The 16k is a lifetime tax free limit for gifts from all strangers. The annual gift exemption is 3k.

The location of the account where the lodgement is made determines whether irish tax is payable. If it's an Irish account the recipient may have an obligation to pay CAT if this gift aggregated with other gifts from the same group exceeds the tax free amount.

Taxuser1

punisher5112 wrote: »

This thing always amazes me because how do they know for example you don't owe them it or its payment for a car or bike let's say...

Tax is self assessment. They don't know. You are asked to be truthful.

looksee

http://www.payeanytime.ie/en/press/defaulters/index.html

That's what they thought!

Peregrinus

Taxuser1 wrote: »

The location of the account where the lodgement is made determines whether irish tax is payable. If it's an Irish account the recipient may have an obligation to pay CAT if this gift aggregated with other gifts from the same group exceeds the tax free amount.

I don't think this is correct. From the OP, both the donor and the donee are in Ireland. Assuming at least one of them is resident or ordinarily resident in Ireland, then there is a potential for CAT liability regardless of where the property comes from or goes to.

exaisle

The suggestion to evade tax in above posts is not helpful. Tax evasion is illegal.

If OP wishes to legitimately avoid paying CAT, they can pay 3k this year and the balance next year. This doesn't affect the Class threshold of €16,250.

Taxuser1

Peregrinus wrote: »

I don't think this is correct. From the OP, both the donor and the donee are in Ireland. Assuming at least one of them is resident or ordinarily resident in Ireland, then there is a potential for CAT liability regardless of where the property comes from or goes to.

Yes you're correct of course but I took that as a given and I didn't expand my meaning. The three parts for CAT are residence of disponer, residence of beneficiary and situs of asset (irish or not) if residence of either above is in question. Specifically I was referring to a situation where there might be a lodgement to an Irish account but neither the disponer or beneficiary are irish resident.