Gift Tax

blarney60

Hi Guys,
My sister recently got an inheritance from one of our family members and is gifting me about 25K from it. Is there a tax implication for that considering that it is below the threshold?. Do I have to do a tax return for it? I have never got a gift or inheritance prior to this.

The other question is that as she lives in Scotland and has asked the solicitor to transfer the total amount to me initially as she does not have a bank account here and then I can arrange to transfer her money to her as soon as she can find the most cost effective way to do it getting the best sterling exchange. Any issues with this as technically I will have received the money which belongs to her and then transfered it on? I dont want it to be deemed as income to me!! If there is I can always ask her to just get the 25K send to me and get hers sent on seperately.

Thank you
Paul

sword1

blarney60 wrote: »

Hi Guys,
My sister recently got an inheritance from one of our family members and is gifting me about 25K from it. Is there a tax implication for that considering that it is below the threshold?. Do I have to do a tax return for it? I have never got a gift or inheritance prior to this.

The other question is that as she lives in Scotland and has asked the solicitor to transfer the total amount to me initially as she does not have a bank account here and then I can arrange to transfer her money to her as soon as she can find the most cost effective way to do it getting the best sterling exchange. Any issues with this as technically I will have received the money which belongs to her and then transfered it on? I dont want it to be deemed as income to me!! If there is I can always ask her to just get the 25K send to me and get hers sent on seperately.

Thank you
Paul

Tax on any over 3k. She could give you 3 k every year, or if you are married 3k to you and 3k to your wife

kirb42

Blarney60 , Always best to seek good professional advice on these matters, I would imagine your Solicitor would have access to an Accountant, between them they should be able to set you straight.. offhand though to answer your question, Capital Acquisitions Tax between Siblings is at present a life time threshold of €30150, above that and your liability will be 33%, additional to your annual Small Gift Exemption of €3000, Assuming you haven't received a previous gift or consideration, €25000 should be exempt..mention it to your Solicitor though, it won't be time wasted..

The_Pretender

sword1 wrote: »

Tax on any over 3k. She could give you 3 k every year, or if you are married 3k to you and 3k to your wife

You're confusing it with the first €3,000 given to any person being tax exempt. The Sister falls into Group B for the purpose of CAT. The threshold for same is €32,500.

MFS2

I'd be careful with the transfer of all the monies to you. Just make sure you have sufficient corroborating paperwork to back it up.

Shouldn't be any CAT but as the others mentioned you should get professional advice. Look up gift splitting.

sburn

No need to do a return as you haven't reached 80% of the relevant threshold i.e. €26,000 in your case.

jjjd

As others have said, look up gift splitting - as your sister is making a gift to you not long after receiving a benefit herself. If the gift is 25K sterling it might put you over the threshold to make a return.

dogsears

jjjd wrote: »

As others have said, look up gift splitting - as your sister is making a gift to you not long after receiving a benefit herself. If the gift is 25K sterling it might put you over the threshold to make a return.

No gift splitting as the benefit taken by the sister of OP was an inheritance.

Big Barry

I've only recently heard about this "Gift Tax" scam I couldn't believe it was even a real tax. The government have some neck.

But there is an easy away around it just have the money made out in cash.

barneystinson

Big Barry wrote: »

I've only recently heard about this "Gift Tax" scam I couldn't believe it was even a real tax. The government have some neck.

But there is an easy away around it just have the money made out in cash.

It's actually one of the fairest taxes on the statute books, if you subscribe at all to the notion of taxing wealth. If someone has the wealth to make big gifts, and if the other person through no merit on their part receives a big gift, why shouldn't they share a proportion of their good fortune with the rest of society...

dogsears

Big Barry wrote: »

But there is an easy away around it just have the money made out in cash.

Quite apart from the fact that what you appear to be suggesting would amount to evasion, good luck getting any solicitor (or bank) to co-operate with that.

Big Barry

dogsears wrote: »

Quite apart from the fact that what you appear to be suggesting would amount to evasion, good luck getting any solicitor (or bank) to co-operate with that.

All someone has to do is go into a bank and withdraw their money in cash and then pass it on to the person they want to give to as a Gift.

Also it's not Tax "evasion" because the individual would of already paid tax on the money they earned.

Big Barry

barneystinson wrote: »

It's actually one of the fairest taxes on the statute books, if you subscribe at all to the notion of taxing wealth. If someone has the wealth to make big gifts, and if the other person through no merit on their part receives a big gift, why shouldn't they share a proportion of their good fortune with the rest of society...

It's a disgusting tax it means you can't even buy a family member a wedding gift without running the risk of falling foul of revenue.

relax carry on

Big Barry wrote: »

All someone has to do is go into a bank and withdraw their money in cash and then pass it on to the person they want to give to as a Gift.

Also it's not Tax "evasion" because the individual would of already paid tax on the money they earned.

Perhaps in your definition of tax evasion non declaration of a reportable gift received is not evasion. You may wish spend a bit of time reading a little bit.

http://www.revenue.ie/en/tax/cat/leaflets/it39.html

http://www.revenue.ie/en/tax/cat/gift-inheritance.html

Also depending​ on amounts you are talking about, the banks are obliged to report suspicious transactions.

http://www.citizensinformation.ie/en/money_and_tax/personal_finance/financial_institutions/money_laundering_in_ireland.html

Big Barry

relax carry on wrote: »

Perhaps in your definition of tax evasion non declaration of a reportable gift received is not evasion. You may wish spend a bit of time reading a little bit.

http://www.revenue.ie/en/tax/cat/leaflets/it39.html

http://www.revenue.ie/en/tax/cat/gift-inheritance.html

Also depending​ on amounts you are talking about, the banks are obliged to report suspicious transactions.

http://www.citizensinformation.ie/en/money_and_tax/personal_finance/financial_institutions/money_laundering_in_ireland.html

The revenue seem to be takin the piss here.

Not surprising given that these were the same people who brought in the house tax.

Anyway I took 10k in cash out of the bank a few years ago without any problems.

The_Pretender

Big Barry wrote: »

Also it's not Tax "evasion" because the individual would of already paid tax on the money they earned.

And VAT is a tax on money you've earned and already paid tax on, and nurses and gardai are paying tax on money that comes from other peoples taxes and so on.

It's not a tax on the person giving the money, it's a tax on the person receiving the money.

dogsears

Big Barry wrote: »

All someone has to do is go into a bank and withdraw their money in cash and then pass it on to the person they want to give to as a Gift.

Also it's not Tax "evasion" because the individual would of already paid tax on the money they earned.

Big Barry wrote: »

But there is an easy away around it just have the money made out in cash.

If its not evasion as you state so confidently, why would you bother to describe an "easy way round it"?

Big Barry

dogsears wrote: »

If its not evasion as you state so confidently, why would you bother to describe an "easy way round it"?

I'd call it "tax planning" .

barneystinson

barneystinson wrote: »

It's actually one of the fairest taxes on the statute books, if you subscribe at all to the notion of taxing wealth. If someone has the wealth to make big gifts, and if the other person through no merit on their part receives a big gift, why shouldn't they share a proportion of their good fortune with the rest of society...

It's a disgusting tax, absoluely vile. Society should have zero entitlement to even the sniff of a gift or inheritance. Many more forward thinking counties have lower rates or have abolished it altogeather.

dogsears wrote: »

If its not evasion as you state so confidently, why would you bother to describe an "easy way round it"?

There are legal "ways around it" to some extent but not completely under normal circumstances, good tax planning is essential to prevent "society" :rolleyes: getting money they shouldn't.

dogsears

Dwayne Crashing Beach wrote: »

There are legal "ways around it" to some extent but not completely under normal circumstances, good tax planning is essential to prevent "society" :rolleyes: getting money they shouldn't.

Whatever a person thinks of whether a tax should exist or not, anyone who suggests that a way round it is to take money in cash is quite clearly not interested in "tax planning". Their objective, and I'd suggest that is clearly what is implied by the poster above, is to conceal any official record of the transaction by doing it in cash. That is textbook evasion and attempting to pretend its just legitimate tax planning is laughable.

And I've engaged with this rubbish longer than good judgement allows. Bye.

Big Barry

dogsears wrote: »

Whatever a person thinks of whether a tax should exist or not, anyone who suggests that a way round it is to take money in cash is quite clearly not interested in "tax planning". Their objective, and I'd suggest that is clearly what is implied by the poster above, is to conceal any official record of the transaction by doing it in cash. That is textbook evasion and attempting to pretend its just legitimate tax planning is laughable.

And I've engaged with this rubbish longer than good judgement allows. Bye.

It would not be "textbook evasion" by definition if the person has already paid Tax on their income.

Peregrinus

Big Barry wrote: »

It would not be "textbook evasion" by definition if the person has already paid Tax on their income.

I wouldn't run this defence in court, if I were you. It absolutely would be textbook evasion. Concealing or not reporting a transaction in order to avoid a liablity to CAT is tax evasion, and it doesn't cease to be tax evasion merely because (if it is the case) the donor is funding the transaction with funds which have already ben subject to income tax.

Big Barry

Peregrinus wrote: »

I wouldn't run this defence in court, if I were you. It absolutely would be textbook evasion. Concealing or not reporting a transaction in order to avoid a liablity to CAT is tax evasion, and it doesn't cease to be tax evasion merely because (if it is the case) the donor is funding the transaction with funds which have already ben subject to income tax.

Hmm I wonder if travellers are tax exempt ? I've never known a traveller who didn't do all their business in cash.

If its legal for travellers to do it I can't why the rest of us can't do all our business in cash.

barneystinson

Big Barry wrote: »

Hmm I wonder if travellers are tax exempt ? I've never known a traveller who didn't do all their business in cash.

If its legal for travellers to do it I can't why the rest of us can't do all our business in cash.

I don't think anyone has a problem with you proposing to do the transaction in cash; it's the reason you stated for doing it in cash that people have taken issue with.

Strictly (and legally) speaking it's none of your business or concern whether the recipient of a gift complies with their tax obligations.

However, it absolutely is tax evasion to deliberately or negligently fail to file a return or pay a tax liability. Effecting a transaction in cash so that (you think) it's harder to detect doesn't alter this fact.

Big Barry

barneystinson wrote: »

I don't think anyone has a problem with you proposing to do the transaction in cash; it's the reason you stated for doing it in cash that people have taken issue with.

Strictly (and legally) speaking it's none of your business or concern whether the recipient of a gift complies with their tax obligations.

However, it absolutely is tax evasion to deliberately or negligently fail to file a return or pay a tax liability. Effecting a transaction in cash so that (you think) it's harder to detect doesn't alter this fact.

Once the money goes into cash the authorities have no way of tracking where it goes.

dogsears

dogsears wrote: »

Whatever a person thinks of whether a tax should exist or not, anyone who suggests that a way round it is to take money in cash is quite clearly not interested in "tax planning". Their objective, and I'd suggest that is clearly what is implied by the poster above, is to conceal any official record of the transaction by doing it in cash. That is textbook evasion and attempting to pretend its just legitimate tax planning is laughable.

And I've engaged with this rubbish longer than good judgement allows. Bye.

I never suggested doing anything "in cash". There are perfectly legitimate ways of tax planning such as gifting 3k per year over a number of years (which could be up to 12k per year if given from a joint account to a joint account).

Peregrinus

Big Barry wrote: »

Hmm I wonder if travellers are tax exempt ? I've never known a traveller who didn't do all their business in cash.

If its legal for travellers to do it I can't why the rest of us can't do all our business in cash.

Doing business in cash is perfectly legal. Tax evasion consists not of doing business in cash, but of failing to make tax returns required by law, or making false returns.