CAT on gift from a parent

chimneypot20 · 16-12-2020 11:58am #1

Just wondering, what is the limit a parent is allowed gift to a child, in a calendar year after which any sort of tax needs to be paid on that by the child?

nompere · 16-12-2020 12:22pm

chimneypot20 wrote: »

Just wondering, what is the limit a parent is allowed gift to a child, in a calendar year after which any sort of tax needs to be paid on that by the child?

If there have been no previous gifts since 5 December 1991, €335,000 plus small gift allowance of €3,000 - so €338,000.

chimneypot20 · 16-12-2020 1:34pm

What is small gift allowance?

cython · 16-12-2020 1:44pm

chimneypot20 wrote: »

What is small gift allowance?

https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/cat-treatment-receipts-by-children.pdf covers it pretty well, but in short any parent can gift €3,000 each year to a child without any liability arising for CAT/

The €335,000 referred to by the previous poster is the lifetime tax free threshold, so were a parent to gift €338,000 in a year, then the child could only receive €3,000 per annum (under the same gift allowance) from then on without a liability arising.

chimneypot20 · 16-12-2020 3:00pm

Cool got it. So €3,000 per year from each parent. Thanks guys.

pnecilcaser · 19-12-2020 6:58pm

Is that €338,000 a lifetime thing though? Once you gift it, when the parent passes on the CAT relief is already used up?

Bobby1984 · 19-12-2020 10:09pm

pnecilcaser wrote: »

Is that €338,000 a lifetime thing though? Once you gift it, when the parent passes on the CAT relief is already used up?

€335k is a lifetime threshold. There is an additional €3k exemption per year from each parent

Maximus47 · 21-12-2020 1:52pm

both parents can gift 3000 being annual exemption of 6000.

this 3000 can be gifted even to a non relative.

Pkiernan · 21-12-2020 1:55pm

FYI, it doesnt have to be from a parent to a child.

Full details here...

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

Maximus47 · 21-12-2020 5:48pm

No - it can be given to a stranger.

Likewise when claiming medical expenses if you pay for a non relative or indeed for a relative you can claim the relief.

wildwillow · 21-12-2020 5:57pm

The €3000 can be given to anyone and there is no limit on how many you can receive it from. Just be careful that you keep the payments a full calendar year apart. Pick a birthday or Christmas so you give on the same date each year.

It is a great way of giving to children and grandchildren, if you can afford it, and your estate is likely to exceed the limits. Especially useful if there is only one or two children.

chimneypot20 · 22-12-2020 10:27am

Just to be sure Im understanding when you say "keep payments a full calendar year apart". Does that mean you could receive a gift in December and then in January you could receive another gift, granted that the gift in January is the only gift you will receive that year? Both gifts in this case would be in different years.

namenotavailablE · 22-12-2020 10:30am

Correct.

The 3000 small gift exemption applies per year, per giver. So, you could receive 3000 from John in December 2020 and again in January 2021. Both are exempt.

wildwillow · 22-12-2020 10:43am

Sorry, I misread the article in Irish Times Nov 24 last, where it was suggestd to pick a certain day each year. It is a very comprehensive article.
One point to remember is that if both parents are gifting a child in the same year, each must have their own account. In other words they shouldn't use a joint account as then it can't be proved that each parent contributed just €3000.

JohnnyKq · 22-12-2020 10:36pm

wildwillow wrote: »

Sorry, I misread the article in Irish Times Nov 24 last, where it was suggestd to pick a certain day each year. It is a very comprehensive article.
One point to remember is that if both parents are gifting a child in the same year, each must have their own account. In other words they shouldn't use a joint account as then it can't be proved that each parent contributed just €3000.

What if each parent wrote a cheque and signed it for 3000?

wildwillow · 23-12-2020 11:02am

Don't know the answer to that.
It seems the funds must come from the person gifting. How you prove that I'm not sure.

It is probably to prevent multiple transfers which are not genuinely funded by the person gifted, as in adult children gifting each other but the funds coming from the parents.

monseiur · 23-12-2020 11:08am

JohnnyKq wrote: »

What if each parent wrote a cheque and signed it for 3000?

Can be paid in cash too, preferably in brown envelope !

JohnnyKq · 23-12-2020 12:17pm

monseiur wrote: »

Can be paid in cash too, preferably in brown envelope !

Sorry my folks are not TDs!!!

Emma2019 · 23-12-2020 3:10pm

Not sure how the joint account thing works in situations where one parent is the solitary earner. and they only have a joint bank account. I've never come across needing it to be paid from separate bank accounts - is this a common thing Revenue request?

waterfordwendy · 18-02-2021 7:55pm

Sorry to dig this up again but my question seems relevant and it might also help others.

1. If my parents gift a site to me (Worth say €60,000) then I will not have to pay CAT as this is below the €335,000 threshold, is that correct? I will not be selling or building on the site, if I do, for at least 5 years.
2. Will I have to pay stamp duty on the site that is gifted to me?
3. And then should I receive an inheritance from my parents in the future (this will still be well below €335,000, including said value of the site) I will still not have to pay CAT?

I would greatly appreciate it if someone could answer that for me.

Thanks

wildwillow · 18-02-2021 8:33pm

As long as yu are under the threshold for the total amount you won't be liable for tax.

Once you reach a certain percentage you inform revenue you have received that amount.

waterfordwendy · 18-02-2021 8:35pm

wildwillow wrote: »

As long as yu are under the threshold for the total amount you won't be liable for tax.

Once you reach a certain percentage you inform revenue you have received that amount.

Thank you for your reply. Lastly, will I have to pay stamp duty on the site that is gifted to me?

Geuze · 18-02-2021 10:57pm

waterfordwendy wrote: »

Thank you for your reply. Lastly, will I have to pay stamp duty on the site that is gifted to me?

Read this:

https://revenue.ie/en/property/stamp-duty/index.aspx

specifically, read this

https://revenue.ie/en/property/stamp-duty/gifts-and-inheritances/index.aspx

Comer1 · 19-02-2022 5:20pm

https://www.boards.ie/discussion/comment/116329129#Comment_116329129

Finance hurts my head, so if I gave each of my children €30,000 for a deposit on a house in one lump sum, they do not have to pay any tax on that because it's below the €335,000 threshold?

downtheroad · 19-02-2022 5:24pm

https://www.boards.ie/discussion/comment/118659196#Comment_118659196

Correct, but to keep as much of the €335,000 threshold available for them in future, you and your spouse could give your children €3k each under the small gift exemption and this does not impact the €335k threshold. So that would be €6k tax free to each child. Then if the children have their own partners you could give those partners €3k from each of you and your spouse. So rather than €30k being taken off of their €335k threshold, only €18k would be deemed as the gift, as €12k falls under the small gift exemption.

Better again, if the deposit can wait til the end of the year, you could do €12k at the end of December and €12k in early January 2023, so now €24k of the €30k is under the small gift exemption, leaving €6k to come off of their €335k CAT threshold.

Comer1 · 19-02-2022 5:40pm

Great advice, thanks so much!

ThreeGreens · 22-02-2022 4:48pm

"1. If my parents gift a site to me (Worth say €60,000) then I will not have to pay CAT as this is below the €335,000 threshold, is that correct? I will not be selling or building on the site, if I do, for at least 5 years."

Also be mindful of Capital Gains Tax.

Normally your parents would be subject to capital gains tax on the gifting of land (based on its market value). However there is an exemption for the gift of a site to a child (assuming it's less than 1 acre and valued at less than €500K).

However if you don't build and occupy the house, then you could be liable for the CGT that they would have been liable for (if they weren't exempt) when you sell it.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cgt-reliefs/transfer-of-a-site-from-a-parent-to-a-child.aspx

CAT on gift from a parent

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