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Capital Acquisitions Tax question

  • 12-05-2021 5:34pm
    #1
    helldesign
    Registered Users Posts: 59 ✭✭


    Hello.

    I'm preparing to make an attempt for a mortgage and luckily my parents wish to help me out with 35k as a gift. I got hyped until I found about the Capital Acquisitions Tax.

    Does it mean that if they send me 35k I will have to pay 1/3 for tax (33%)?

    Is there any exception at least, when buying first home or something like that?


Comments

  • #2
    SureYWouldntYa
    Registered Users, Registered Users 2 Posts: 7,773 ✭✭✭SureYWouldntYa


    There is a lifetime threshold for parents giving money to their children which is tax free

    It is €335,000

    Only when above this amount in your lifetime will CAT of 33% apply

    There is also a yearly exemption of €3,000, this is from any person to another and will not eat into your threshold

    So you parents can give you the €35k, 3k from each of them will come off your yearly exemption leaving 29k to be taken off your lifetime threshold from your parents. If you have a partner who is buying the house with you they can give him/her 3k each also, which would only leave 23k to be taken off your lifetime threshold

    Have a read of the below

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


  • #3
    helldesign
    Registered Users Posts: 59 ✭✭helldesign


    I'm so relieved to hear that!

    Thank you for explaining, I really appreciate it!


  • #4
    Will Yam
    Registered Users, Registered Users 2 Posts: 671 ✭✭✭Will Yam


    SureYWouldntYa wrote: »
    There is a lifetime threshold for parents giving money to their children which is tax free

    It is €335,000

    Only when above this amount in your lifetime will CAT of 33% apply

    There is also a yearly exemption of €3,000, this is from any person to another and will not eat into your threshold

    So you parents can give you the €35k, 3k from each of them will come off your yearly exemption leaving 29k to be taken off your lifetime threshold from your parents. If you have a partner who is buying the house with you they can give him/her 3k each also, which would only leave 23k to be taken off your lifetime threshold

    Have a read of the below

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

    What you could do also, time permitting is to delay some of the payment until the end of the year.

    In that way your parents can give you a further 6k outside your threshold - and if a partner is involved 12k - thus reducing the amount off lifetime threshold to 11k.


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