Inheritance Tax implications for cheque gift

lalalady1990

Hi, I have been gifted a cheque for 14k from my dad. I know you are allowed a gift of 3k per year tax free and if it goes over that, it will be taxed as part of your inheritance if it goes over the 335k threshold (may potentially inherit the farm). Would I be right in saying that if this cheque was cashed in my boyfriend’s account, I avoid paying tax in the future on this amount?

namenotavailablE

If the cheque is made out in your name and is for your benefit, I don't see how you could avoid including it when calculating your tax free threshold for any future benefit. The €3000 relief reduces the taxable amount so if your mother is alive, maybe each parent could provide €7000 and you can deduct €3000 off each cheque.

You should also check out 'Agricultural relief' regarding a potential farm inheritance- this is a valuable relief as it reduces the assessable value of qualifying agricultural property by 90%.

silver2020

Can you split it. 3k from your dad and 3k from your mum now. Then 3k for each in January giving you 12k and then just 2k is taken into consideration

Ronney

Or your Mum and Dad could each gift you and your Boyfriend 3000 this year and next year. (€24k)

musicfan1ie

Hi OP

There is some planning you can do. Do you need all the €14K now? Also, is there any typ eof expense you're paying.

For example, if you were to cancel the €14K cheque and then, you received €3K from your mum and €3K from your Dad now. So for 2021, no gift tax. Then, your Dad and mum did the same thing on 1 January 2022, so this is a different year. Again no tax on that €6K.

With cheques in particular, it can be hard to tell what something is for sometimes. I recently went back and looked through 7 years of someone's bank accounts and there was all sort of payments to kids. Sometimes gifts, sometimes they were being paid for a bill they paid on behalf of their parent. If you had a bill also for something particular, maybe you can change the bill to your parents so that they pay the remaining €2K directly to the supplier.

All additional hassle, but if you don't need all the cash straight away, it could be tax free.