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Paying tax on someone's behalf

  • 19-02-2021 1:52pm
    #1
    Clauric
    Registered Users, Registered Users 2 Posts: 610 ✭✭✭


    I am looking for advice on how to pay tax on someone's behalf. Basically the situation is this:
    • My now adult daughter has some investments that were started before she was a minor (2 - 3 years ago).
    • I control the investments through the account being set up as a c/o account for a minor.
    • Recently the amount of book profit has increased to where it would be a good idea to take the profits (about 33%).
    • The profits, except the taxes, would be reinvested into another investment.
    • The profits would be subject to CGT, and there would be a 4 figure tax bill.
    • The way that the investment was originally structured is that she would not have access to the prinicple or profits for another 2 years (at a particular age).

    My questions are:
    1. Can I pay the CGT on her behalf using her PPSN?
    2. If I can, can I transfer the money to my account, before paying the CG?
    3. Are there any tax liabilities for me doing this?


Comments

  • #2
    Clauric
    Registered Users, Registered Users 2 Posts: 610 ✭✭✭Clauric


    bump


  • #3
    scheister
    Registered Users, Registered Users 2 Posts: 1,310 ✭✭✭scheister


    Clauric wrote: »
    I am looking for advice on how to pay tax on someone's behalf. Basically the situation is this:
    • My now adult daughter has some investments that were started before she was a minor (2 - 3 years ago).
    • I control the investments through the account being set up as a c/o account for a minor.
    • Recently the amount of book profit has increased to where it would be a good idea to take the profits (about 33%).
    • The profits, except the taxes, would be reinvested into another investment.
    • The profits would be subject to CGT, and there would be a 4 figure tax bill.
    • The way that the investment was originally structured is that she would not have access to the prinicple or profits for another 2 years (at a particular age).

    My questions are:
    1. Can I pay the CGT on her behalf using her PPSN?
    2. If I can, can I transfer the money to my account, before paying the CG?
    3. Are there any tax liabilities for me doing this?

    Few different questions here. As a result i will talk at a high level but you should speak to a tax professional.

    You can gift her the money to pay the tax bill. This would be a separate transaction to the investments above and i would treat them as this. Be careful that any trasnfers could not be seen as a gift from her to you.


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