Small gift exemption

yourdeadwright

Just a quick one i know the small gift exemption is 3 grand per year per parent,

But could a single parent give there son 3 grand & his fiance a 3 grand cash present (so combined 6 gramd) or would it have to be a combine 3 grand so 1500 each to avoid being taxed

brian_t

It's 3 grand from anyone not just a parent. And you can give 3 grand to as many people as you want.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/small-gift-exemption/index.aspx

Donald Trump

Does it come off your lifetime allowances?

Bold Abdu

https://www.boards.ie/discussion/comment/118028244#Comment_118028244

No. Completely separate.

dennyk

The exemption is €3000 per year on gifts between a specific disponer and a specific beneficiary. As such, a single person can give gifts valued at €3000 or less to as many beneficiaries as they wish in a single year and none of those gifts would be subject to tax. Similarly, a beneficiary can receive gifts valued at €3000 or less from any number of disponers and would not have to pay tax on them. Only if specific person A gives specific person B more than €3000 in gifts in a single year would CAT (or aggregation against the lifetime CAT exemption thresholds) be applied.

Henry Ngo

Hi All,

I want to ask that In case, in a year, my father sends 100 gifts (€3,000 per gift) to my 100 friends. Then, each my friend sends back €3,000 to me, as a gift.

Can I receive the €300K money with CAT exemption?

Thanks

L1011

https://www.boards.ie/discussion/comment/120478902#Comment_120478902

A gift cannot have requirements - each an every one of those 100 friends could decide to keep it and give you nothing.

If given to them with a requirement to then give it to you, it will come from your Group A threshold as it will be seen as the obvious transfer from parent to child that it is.

Henry Ngo

https://www.boards.ie/discussion/comment/120478936#Comment_120478936

Yes, no requirement. My friends know what they should do when they received E3,000 from my father.

I and my father don't require anything. My friends won't risk their lives.

In this case, Is it legal for CAT exemption?

Thanks,

Dav010

https://www.boards.ie/discussion/comment/120479057#Comment_120479057

Why would their lives be at risk if there isn’t a requirement involved? And who has 100 friends who would all agree to tax evasion, whilst at the same time knowing that legally, there is no requirement to pass the money to you?

L1011

https://www.boards.ie/discussion/comment/120479057#Comment_120479057

Your friends lives being at risk means there is a requirement, hence it is not an exempt small gift and you are liable for CAT once the threshold is met.

Jim2007

https://www.boards.ie/discussion/comment/120479057#Comment_120479057

They might not risk their lives, but I'd be willing to bet that al least one of them is not going to risk going to prison for you either.... The more people you involve in trying to defraud the Revenue the more likely you'll be caught.

Henry Ngo

https://www.boards.ie/discussion/comment/120479094#Comment_120479094

I think everyone should know about Omerta law. So I believe that all friend will send back the gift to me.

Dav010

https://www.boards.ie/discussion/comment/120480137#Comment_120480137

I really don’t think you have thought this through, and have seen one too many bad mafia films.

Henry Ngo

https://www.boards.ie/discussion/comment/120480151#Comment_120480151

I know many people (in my friends) in Ireland already do that to avoid CAT. No one doesn't send back the gift.

I think it is a good case to avoid CAT for some hundred thousands euros per year.

I wonder only that is it legal? And if Revenue know that, what can Revenue do if they don't have any evidence, such as requirement, letter, voice,....

Dav010

https://www.boards.ie/discussion/comment/120480164#Comment_120480164

You understand that in Ireland you pay tax on bank deposits?

Allinall

https://www.boards.ie/discussion/comment/120480164#Comment_120480164

You can’t do what you are proposing within the law.

NinjaTruncs

Is there anywhere that documents the details of the small gift exemption?

Looking on both revenue.ie and citizensinformation.ie there isn't much detail regarding the exemption.

dennyk

https://www.boards.ie/discussion/comment/120479057#Comment_120479057

Your father giving a hundred random people a gift of €3000 each with the expectation that each of those people should then give a gift of the same amount to you is most likely going to be viewed by Revenue as a gift from your father to you. It doesn't matter whether that expectation is directly expressed or not; "Here's three grand, you know what to do..." doesn't magically make tax evasion legal, and Revenue are not stupid. If it's something that happens rarely and the amount in question is small, it's less likely to come to Revenue's attention, but if it literally involves a few hundred grand, that's likely to raise some red flags and cause Revenue to take a closer look, and you will most likely be caught, as they will easily be able to trace the source of those transfers and it will be very obvious to them what's going on.

Henry Ngo

https://www.boards.ie/discussion/comment/120480172#Comment_120480172

At the moment, the tax amount is very small. In addition, we will not put money in the bank a long time. We will buy properties in Ireland or Foreign soon.

Henry Ngo

https://www.boards.ie/discussion/comment/120480287#Comment_120480287

You can read in here.

https://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html

Henry Ngo

https://www.boards.ie/discussion/comment/120480870#Comment_120480870

I think Revenue will not have any evidence. However, we should avoid Revenue's attention. My father should give E3K by Cash to my friends, and they will gift the E3K to me after that. Do you think the solution is better?

Or Do I need to combine my 50 friends and my 50 family members?

Dav010

https://www.boards.ie/discussion/comment/120482675#Comment_120482675

If Revenue tax what is deposited in a bank, ……….

And the Bank would be obligated suspicious activity in an account, like 100 lodgements of €3000, which are not in keeping with the account owners stated income, to Revenue/Gardai.

https://www.centralbank.ie/docs/default-source/Regulation/how-we-regulate/anti-money-laundering-and-countering-the-financing-of-terrorism/legislation/anti-money-laundering-bulletin-on-suspicious-transaction-reporting---november-2017.pdf

Allinall

https://www.boards.ie/discussion/comment/120482727#Comment_120482727

Revenue don’t need any more evidence.

They will raise an assessment and it will be up to you to prove- to revenue’s satisfaction, that this was innocent transaction, without your knowledge, and that you happened to receive 100 gifts if €3,000 in the same year, all originating from your father.

You will be laughed out of it.

Gt552

Would it be possible to buy a car and then sell it to son or daughter for say 100 euro? Would they try to charge Cat on this?

My sis sold her car for a dollar to her friend in the states but it was a piece of crap and it was 20 yrs ago

Peregrinus

https://www.boards.ie/discussion/comment/120497174#Comment_120497174

Selling an asset to someone at an undervalue is a gift, to the extent of the undervalue. So if the Revenue become aware of the transaction, and if the value involved mean that there is a CAT liability, yeah, they'll charge the tax.

In practice the gift will be well within the 335k group A lifetime exemption, so unless the child has already received very substantial gifts/inheritances from their parents, the only consequence will be to eat away a tiny little bit at that exemption.

phildub

A gift from a parent to child is group A threshold and is tax exempt, applying the small gift exemption tax liability is 270,000 and you still have 65,000 left over.

If you're not using a bank then how is revenue going to know about it.

Trying to buy property in Ireland in cash, saying you got 100 gifts from a 100 friends, I hope you know a solicitor willing to tick that AML box!

This is a redicilious conversation

hullaballoo

Mod: @Henry Ngo if you post this tax evasion query here again you will be banned.

Thread closed.