How to handle this situation?

Clauric

Looking for advice on how to handle a tax situation.

My minor daughter was left a low 5 figure sum (< €25k) a few years ago in a will. As part of the stipulations, the money needed to be invested (in her name, but with me as guardian) until her 21st birthday. I've followed that request, and it is currently sitting in a BlackRock iShares product, making about 6% pa. All of the investment returns are classed as income.

Recently, however, she has also started working. She earns between €100 - €200 per week from her job, and pays the correct taxes for her age and income.

MY question is now that she is earning more money, the income from the iShares will also need to be included in any declarations, and the correct taxes paid on it.

What is the best way of handling this, from the perspective of paying the correct taxes, etc.?

Calahonda52

what age is she now?
what was the relationship to the person who left the mula to her?
What year was it left?

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-thresholds-post-november-2011.aspx

Clauric

Calahonda52 wrote: »

what age is she now?
what was the relationship to the person who left the mula to her?
What year was it left?

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-thresholds-post-november-2011.aspx

I've dealt with all the original tax issues, and completed the declarations necessary for CGT/inheritance tax.

What in looking for now is advice on how to deal with the income tax especially as she does not have sight of what she is earning from the investments. Also, she is still a minor for another 15 months.

Peregrinus

As far as I know the position is exactly the same as if she were an adult. She can either ask the Revenue to adjust her PAYE tax credits so that the tax due on the investment income is collected through the PAYE system, or she can opt to pay that tax separately. Either way, she'll need to give the Revenue details of the investment income, so you'll need to give that to her.

namenotavailablE

Based on the total income of €11900, (max of €200x52 weeks from employment + 6% x €25000 investment income) she will have a minimal tax/levies exposure. I'd expect zero deductions from her employment income and just some PRSI on the investment income.

Clauric

Peregrinus wrote: »

As far as I know the position is exactly the same as if she were an adult. She can either ask the Revenue to adjust her PAYE tax credits so that the tax due on the investment income is collected through the PAYE system, or she can opt to pay that tax separately. Either way, she'll need to give the Revenue details of the investment income, so you'll need to give that to her.

How does she do that? Does she need to do a self declaration form every year, including estimating next year's earnings, or is there another method?

Peregrinus

Clauric wrote: »

How does she do that? Does she need to do a self declaration form every year, including estimating next year's earnings, or is there another method?

Open to correction here, but I think she reports the earnings after they have accrued, and then her allowances are adjusted to collect what is owing over the following year. Rinse and repeat. In the long run, it all comes out in the wash.