Gift for deposit

irishbabe52 · 03-10-2019 8:39pm #1

Hi folks,
Looking for some advice. My father is giving me 10k as a gift towards a deposit. Problem is he's over 80 and doesn't believe in banks so is giving it to me in cash!!
He has an irrational fear of putting his name to anything official, like a gift letter, and I don't want to push the issue with him.
Will the bank question me when I go to lodge it?
Would I be better getting my 2 siblings to lodge 5k each and say it's from them?
Obviously there's no tax issues here as it's well below any of the gift thresholds, I'm just wondering what's the best way to get it into my bank account without raising any red flags unnecessarily.

Brussels Sprout · 03-10-2019 11:27pm

I have lodged cheques for high 4-figure amounts to my account without any quesions being asked in the past.

The fact that it's cash might make it seem more dubious but I'm sure that people probably sell cars privately for cash and subsequently deposit that money frequently.
I'd maybe only deposit 9k though - just in case they have to question it if it's over 10k

BrokenArrows · 04-10-2019 9:24am

irishbabe52 wrote: »

Hi folks,
Looking for some advice. My father is giving me 10k as a gift towards a deposit. Problem is he's over 80 and doesn't believe in banks so is giving it to me in cash!!
He has an irrational fear of putting his name to anything official, like a gift letter, and I don't want to push the issue with him.
Will the bank question me when I go to lodge it?
Would I be better getting my 2 siblings to lodge 5k each and say it's from them?
Obviously there's no tax issues here as it's well below any of the gift thresholds, I'm just wondering what's the best way to get it into my bank account without raising any red flags unnecessarily.

I deposited over 10k in cash from a car sale (about 10 years ago)
The teller didnt even bat an eye lid. Just counted it and deposited it.

If you are concerned then just deposit it in a few 2.5k amounts.

Doop · 04-10-2019 10:03am

The bank wont query the money coming in, but they may query it as you are pulling together your deposit. We were quizzed on where money was coming from when showing funds to add to a mortgage as sale agreed price was over mortgage amount.

OP how much time do you have before your house purchase? If it were me I would probably put it in the credit union leave it sit, when time comes say it was from a car sale, or slowly feed it into the account over a few months.

You are allowed an annual cash gift from parent for €3k each year with no tax implication.

my3cents · 04-10-2019 10:17am

Keep the cash and use it over the next few months to pay bills buy groceries etc, when its gone you should have an extra 10k in your account, just don't spend more than you would normally.

GooglePlus · 04-10-2019 10:46am

my3cents wrote: »

Keep the cash and use it over the next few months to pay bills buy groceries etc, when its gone you should have an extra 10k in your account, just don't spend more than you would normally.

Not a bad shout, it would look like you've made a real committment to save and more likely to be a reliable customer for the bank.

jlm29 · 04-10-2019 12:06pm

As above. The bank won’t question the lodgement, but might wonder where you came up with your deposit. The suggestion of keeping the cash is a bit crazy. What if you get broken into?

my3cents · 04-10-2019 12:20pm

jlm29 wrote: »

As above. The bank won’t question the lodgement, but might wonder where you came up with your deposit. The suggestion of keeping the cash is a bit crazy. What if you get broken into?

I agree not the best idea but an option that most people wouldn't think about. Obviously some risk but the father seems to have gotten away with it for many years.

10k isn't going to last most families very long say 4-6 months before its all gone. Problem is if everything is currently paid by direct debit leaving little opportunity to use the cash for everyday transactions. The other big problem with cash is its all too easy to spend.

Claw Hammer · 04-10-2019 6:18pm

The banks are obliged to question any lodgement over €1.5k. Things have tightened up a lot with anti money laundering. The only thing the /p can do is keep the money in cash and pay some of his normal expenses out of it and buy furniture and other things for the house out of the remainder after the closing.

Brussels Sprout · 04-10-2019 6:20pm

Not to mention that that plan won't work if the OP needs to have money in her account as proof of a deposit in the immediate future.

Claw Hammer · 04-10-2019 6:24pm

Brussels Sprout wrote: »

Not to mention that that plan won't work if the OP needs to have money in her account as proof of a deposit in the immediate future.

The o/p is going to need money over and above the deposit for legal fees and furniture.

wonski · 04-10-2019 6:28pm

Claw Hammer wrote: »

The banks are obliged to question any lodgement over €1.5k. Things have tightened up a lot with anti money laundering. The only thing the /p can do is keep the money in cash and pay some of his normal expenses out of it and buy furniture and other things for the house out of the remainder after the closing.

Never heard of that.

It is the mortgage application that is at risk here, not 10k lodgement.

I have no doubt any bank that queries such a relatively low amount of 1.5k. would be out of business after a month

antix80 · 04-10-2019 6:31pm

Put it towards legal fees.
Try to use your own money for the deposit. It's not a big deal, but if you say the gift is towards the purchase of tbe house your dad might need to sign a few documents for the solicitor. The solicitor may also ask his source of funds.

Maybe lodge half to the credit union and half to the bank.

Claw Hammer · 04-10-2019 6:37pm

wonski wrote: »

Never heard of that.

It is the mortgage application that is at risk here, not 10k lodgement.

I have no doubt any bank that queries such a relatively low amount of 1.5k. would be out of business after a month

The banks are obliged to ask where the 10k came from when it is being lodged and report it to the revenue if it is suspicious. Years ago the banks asked no questions but now there are obliged to. As for banks going out of business most of them are broke. I have been asked many times about lodgements. The banks that asked me are still in business (with government support)
CRIMINAL JUSTICE (MONEY LAUNDERING AND TERRORIST FINANCING) ACT 2010

Claw Hammer · 04-10-2019 6:40pm

antix80 wrote: »

Put it towards legal fees.
Try to use your own money for the deposit. It's not a big deal, but if you say the gift is towards the purchase of tbe house your dad might need to sign a few documents for the solicitor. The solicitor may also ask his source of funds.

Maybe lodge half to the credit union and half to the bank.

The o/p has said his father doesn't want to sign anything. that is the cause of the thread.

antix80 · 04-10-2019 6:52pm

Claw Hammer wrote: »

The o/p has said his father doesn't want to sign anything. that is the cause of the thread.

Well.. My advice still stands.. "if you say the gift is towards the purchase of the house your dad might need to sign a few documents for the solicitor".. So simply don't say the source of funds for the purchase of the house is a gift. Maybe it was proceeds from the sale of a car, or bertie ahern gave op a good tip on the ponies.

Claw Hammer · 04-10-2019 6:58pm

antix80 wrote: »

Well.. My advice still stands.. "if you say the gift is towards the purchase of the house your dad might need to sign a few documents for the solicitor".. So simply don't say the source of funds for the purchase of the house is a gift. Maybe it was proceeds from the sale of a car, or bertie ahern gave op a good tip on the ponies.

If he says it was from the sale of a car, what was the reg no? Who was the purchaser. When did he have the car insured from to. When did he buy the car? How did he pay for it? Bull**** stories to explain the source of €10k in an attempt to disguise the source of it are not going to fly ad could in fact lead to a charge of money laundering. This is the adult world.

wonski · 04-10-2019 6:58pm

Claw Hammer wrote: »

The banks are obliged to ask where the 10k came from when it is being lodged and report it to the revenue if it is suspicious. Years ago the banks asked no questions but now there are obliged to. As for banks going out of business most of them are broke. I have been asked many times about lodgements. The banks that asked me are still in business (with government support)
CRIMINAL JUSTICE (MONEY LAUNDERING AND TERRORIST FINANCING) ACT 2010

Someone said 1.5k requires this.

10k yes, not 1.5k

Actually you said this that any lodgement over 1.5k is a subject of anti money laundering regs so not sure what you are on about now...

Caryatnid · 04-10-2019 6:59pm

irishbabe52 wrote: »

Obviously there's no tax issues here as it's well below any of the gift thresholds, I'm just wondering what's the best way to get it into my bank account without raising any red flags unnecessarily.

But it is over the limit for tax, any one person (except your spouse) can only gift 3k max per year, before it is subject to tax (CAT).

This way, for example, you could ask your dad to give you 3k now, and 3k in 2020. Your siblings could also give you 2k each.

Happy to be corrected by anyone who is more knowledgeable than me. Best of luck with the house purchasing OP!

my3cents · 04-10-2019 7:03pm

Caryatnid wrote: »

But it is over the limit for tax, any one person (except your spouse) can only gift 3k max per year, before it is subject to tax (CAT).

This way, for example, you could ask your dad to give you 3k now, and 3k in 2020. Your siblings could also give you 2k each.

Happy to be corrected by anyone who is more knowledgeable than me. Best of luck with the house purchasing OP!

Isn't that 3k allowance apply to inheritance tax? So is only relevant if the father dies?

The whole point of the fathers reasoning for giving cash is probably to avoid paying tax.

Edgware · 04-10-2019 7:07pm

Just lodge it two days after Cheltenham

Claw Hammer · 04-10-2019 7:12pm

wonski wrote: »

Someone said 1.5k requires this.

10k yes, not 1.5k

Actually you said this that any lodgement over 1.5k is a subject of anti money laundering regs so not sure what you are on about now...

The banks ask about anything over 1.5k. !0k in cash would certainly be queried and most likely reported.

antix80 · 04-10-2019 7:13pm

my3cents wrote: »

Isn't that 3k allowance apply to inheritance tax? So is only relevant if the father dies?

The whole point of the fathers reasoning for giving cash is probably to avoid paying tax.

Gift tax and inheritance limits are cumulative. If there's an inheritance down the line it may be relevant. Apart from that, the cash is needed now and it's being gifted now.
My advice isn't to hide it from the tax man, it's simply to avoid the op's father from having to sign docs relating to the house purchase from bank or solicitor pov.

Shamboo1801 · 04-10-2019 7:22pm

Lodge it in â‚¬1000 batches, give or take a few quid, and you'll have your ten grand lodged in ten or twelve weeks. No questions asked

Claw Hammer · 04-10-2019 7:23pm

antix80 wrote: »

Gift tax and inheritance limits are cumulative. If there's an inheritance down the line it may be relevant. Apart from that, the cash is needed now and it's being gifted now.
My advice isn't to hide it from the tax man, it's simply to avoid the op's father from having to sign docs relating to the house purchase from bank or solicitor pov.

It is an offence to disguise the source of money. The bank and the solicitor will ask where the money is coming from. Telling infantile lies is not going to help and may cause serious problems.

wonski · 04-10-2019 7:24pm

Shamboo1801 wrote: »

Lodge it in â‚¬1000 batches, give or take a few quid, and you'll have your ten grand lodged in ten or twelve weeks. No questions asked

Questions might or might not be asked when applying for mortgage, unless it is at least more than 6 months away.

Keep the cash and spend less of your account, but make sure rent and other bills are coming out of it as normal.

Claw Hammer · 04-10-2019 7:41pm

Shamboo1801 wrote: »

Lodge it in €1000 batches, give or take a few quid, and you'll have your ten grand lodged in ten or twelve weeks. No questions asked

There is a suspicious pattern developing which will be queried. the o/p might get away with lodging a few irregular amounts over a period but no way 1k a week. The op will have to buy applicances and floor coverings and furniture as well as gardening tools after the purchase. It is far easier to buy them 1 at a time for cash avoid a paper trail.

Caryatnid · 04-10-2019 8:21pm

my3cents wrote: »

Isn't that 3k allowance apply to inheritance tax? So is only relevant if the father dies?

Re your question, nope, inheritance from a parent has a way higher threshold, thank goodness. However antix80 is correct in that the 3k could count towards inheritance.

Info here (sorry, no way to make this clickable) on both gift and inheritance tax, in case anyone is interested:
https://www.revenue.ie/en/gains-gifts-and-inheritance/gift-and-inheritance-tax-cat/index.aspx

wonski · 04-10-2019 8:28pm

Claw Hammer wrote: »

The banks ask about anything over 1.5k. !0k in cash would certainly be queried and most likely reported.

Do they? Based on what?

Haven't lodged in a while, but 10k seems to be the magic number.

hawkelady · 04-10-2019 8:35pm

Claw Hammer wrote: »

The banks ask about anything over 1.5k. !0k in cash would certainly be queried and most likely reported.[/quote

Utter lies ... this is not factual at all. €1.5k is peanuts and no bank queries lodgments of that small size...
€10k might trigger the odd query but that’s not 100% either.
O/p. You have nothing to hide at all. Best bet is lodge it in installments over the course of 3/4 weeks and no one will raise an eyebrow.
Good luck with house purchase

tricky D · 04-10-2019 8:59pm

Our solicitor had us sign anti-money laundering documents which required explanations about the sources.

Depositing in smaller installments is called smurfing or structuring and Revenue/banks are clued on to it.

My advice is to be up front with the bank and get their advice on how to proceed. They might well be fine with just an explanation and no signing.

Though 7k of the 10k will have to be taxed at inheritance time.

hawkelady · 04-10-2019 9:04pm

Absolutely mad to tell them something that you’ll have to pay inheritance tax on a measly €7k !!
I thought a parent can give a child €300 k without any tax implications?

Sinus pain · 04-10-2019 9:16pm

Could you lot say you saved it yourself at home? If you’ve taken cash out of the bank at all you could say it was to save - that if you kept it in the bank you’d spend it and that you stuck it in a jar

tricky D · 04-10-2019 9:18pm

hawkelady wrote: »

Absolutely mad to tell them something that you’ll have to pay inheritance tax on a measly €7k !!
I thought a parent can give a child €300 k without any tax implications?

Risking mortgage approval would be real madness. So too would Revenue penalties and interest.

It's 310k, the 7k comes into effect over that threshold.

Honesty is the best policy imo.

jlm29 · 04-10-2019 9:47pm

hawkelady wrote: »

Absolutely mad to tell them something that you’ll have to pay inheritance tax on a measly €7k !!
I thought a parent can give a child €300 k without any tax implications?

The 3k per year is an allowance for small gifts, totally separate from what’s allowed with CAT or inheritance. But if the gift is greater than €3k in one year, then the extra (in this case €7k) will be considered down the line.

county · 04-10-2019 10:10pm

You can gift anyone 3k per year be that a family member or a stranger.
If you have a partner that would be 6k tax free and only the 4k would be taxable and that would be taken from your inheritance threshold of 320k, so your new threshold would be 316k.

tomister · 04-10-2019 10:23pm

Saying its a sale of a car will require proof for the mortgage application. I sold an old car to the parents and still needed a gift letter even though it wasn't a gift.
OP your father would only need to sign a letter for the bank stating it is not to be repaid and that he will not have any rights to the property. Its a standard template that they use and does not require a solicitor etc. Nor do the banks try to trace the money to see its origin. I know you've said he won't sign anything but there is no requirement to go to the bank or to provide any additional information

irishbabe52 · 04-10-2019 11:18pm

Thanks for all the replies! There are no tax issues, the money was taxed when he earned it, he just kept it at home instead of lodging it in a bank ðŸ˜‚
It's true, the bank don't care where it comes from really, and said they just want a letter saying it's a gift and the person giving it has no charge over the property. I'm just nervous of lodging that amount of cash and being questioned over it! I have gotten mortgage approval based on the fact I'm getting a gift of 10k, I don't need to have it in my account until I go to drawdown but would like to get it sorted as soon as possible anyway.
I think I'll give 5k to each of my 2 sisters and get them to transfer me 5k each with a letter saying it's a gift, and then they can lodge/spend it which should be easier with the smaller amounts.

Dolbhad · 04-10-2019 11:25pm

Lodging it to a bank won’t raise questions. However if it’s in the last 6 months of your statements submitting to a mortgage, it will be raised. I had lodged 5k from my mother which was a gift towards house purchase and mortgage bank picked up on it and asked where did the money come from etc. If that’s the case they will insist on your dad signing a gift letter and also legal document deed of confirmation. Either lodge now and wait until 6 months have passed for statements or have your dad give to another family member to give to you as a gift who will sign the above. However beware of CAT if doing it that way.

04-10-2019 11:48pm

tricky D wrote: »

Risking mortgage approval would be real madness. So too would Revenue penalties and interest.

It's 310k, the 7k comes into effect over that threshold.

Honesty is the best policy imo.

Unless the op has already received 310k in gifts from his father (which I would say absolutely not the case) then he will pay no tax on the 7k. It doesn’t even need to be declared as it’s such a small amount in comparison to the Group A CAT threshold.

Just tell the bank it’s a gift and there will be no more about it from a lodgment perspective or else do as suggested, spend the money on day to day stuff and save your own salary. I walked into the bank with more than 10k in cash a few days after my wedding and I was barely asked about it, I jokingly said it was wedding presents and there wasn’t another word about it.

Glass fused light · 05-10-2019 12:06am

These days try get the bank to change coins into notes without running it through your bank account.

The banks have a legal obligation to prevent money laundering and to report to both the Gardai and Revenue. So technically they'd have to report a €5 lodgement of if it forms part of a pattern of behaviour.

The lodgement of cash has the initial problem for the bank is to establish where the cash came from. Remember that tax evasion is itself a crime. So for an employee who is paid via bank transfer the question arises where did the cash come from to be lodging 10k cash over a number of weeks or months. Without reasonable explaination the bank would need consider if the money should have been taxed but was not

Edgware · 05-10-2019 9:37am

Shamboo1801 wrote: »

Lodge it in â‚¬1000 batches, give or take a few quid, and you'll have your ten grand lodged in ten or twelve weeks. No questions asked

Theres a babe in my local bank I wouldnt mind giving a daily deposit to

SEPT 23 1989 · 05-10-2019 10:22am

Over 20k cash and they ask questions

wirelessdude01 · 05-10-2019 11:02am

My understanding was that a 3rd party could give a gift of up to €16250 without CAT being an issue. For a parent I thought it was alot higher.

Am I wrong in thinking this?

Dolbhad · 05-10-2019 11:10am

wirelessdude01 wrote: »

My understanding was that a 3rd party could give a gift of up to €16250 without CAT being an issue. For a parent I thought it was alot higher.

Am I wrong in thinking this?

That’s true. Parent to child is category A and strangers is C. Category A is 320k. But if OP was giving the gift to from dad to siblings, they are at Category A. If it’s passed to him it’s CAT B as that comes from siblings which is around the 30k ish Mark. Don’t know exact figure. You can get 3k tax off anyone every year. That’s the small gift exemption

Atlantic Dawn · 05-10-2019 11:15am

Claw Hammer wrote: »

The banks are obliged to question any lodgement over €1.5k. Things have tightened up a lot with anti money laundering. The only thing the /p can do is keep the money in cash and pay some of his normal expenses out of it and buy furniture and other things for the house out of the remainder after the closing.

€15k is the figure they are obliged to report it at, anything below they are not obliged to.

Brussels Sprout · 05-10-2019 1:08pm

irishbabe52 wrote: »

Thanks for all the replies! There are no tax issues, the money was taxed when he earned it, he just kept it at home instead of lodging it in a bank &#55357;&#56834;

Just to point out that the above isn't necessarily true. There are no tax implications for your father if he wants to keep the money himself, true. However, as soon as he tries to give the money to other people then capital acquisition tax (CAT) becomes relevant.

As others have pointed out there are lifetime tax-free thresholds, depending on the relationship and time of the gifts. See here for details:

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

You can make an online submission via revenue.ie to register the gift if you want to do it all properly. You'd need your father's PPS number, which given what you have said about him might be tricky to obtain.

blackbox · 05-10-2019 1:16pm

This may sound like a ridiculous suggestion, but how about telling the truth?

Witcher · 05-10-2019 1:23pm

Claw Hammer wrote: »

The banks are obliged to question any lodgement over €1.5k.

No they're not:rolleyes: Where do people get this stuff?

In the two banks I've worked in no questions were asked for 10k or under, a cent over that and I had to ask and note it, no reporting was done unless there were several lodgements of similar amounts and no viable source of that amount of cash.

jlm29 · 05-10-2019 1:26pm

blackbox wrote: »

This may sound like a ridiculous suggestion, but how about telling the truth?

If someone gets a gift towards a deposit, banks usually require a signed letter that the money is a gift, and the giver won’t try to make a claim on the property etc. The OP can tell the truth all they like, but the bank will still be likely to have something signed to say the dad isn’t going to come back and make a claim on the house

antix80 · 05-10-2019 1:34pm

irishbabe52 wrote: »

I think I'll give 5k to each of my 2 sisters and get them to transfer me 5k each with a letter saying it's a gift, and then they can lodge/spend it which should be easier with the smaller amounts.

Stop! That's crazy stuff.

The issue isn't the gift, it's just the perception the gift is being used to purchase the house. Keep it separate from the funds you'll be using to purchase the house and you'll be grand.

Gift for deposit

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