Gift/House - Parent to Child?

JG0009

Registered User
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9
Hi everybody. Newby here.

After reading that article in the Indo today about gift tax I have a few questions.

The indo said you can give your kids tax free:
1) A home to live in
2) €3000 a year
3) Lifetime gifts of €225k
4) Bed and board
5) Insurance Payouts
6) Medical expenses for the disable.


1) €225K Life time threshold?
If you give a child €225 in one shot, thats it then, their lifetime threshold is used up. But if you gave them say €25k this year and €25k next year, does that count as part of their €225 lifetime threshold, or does the threshold only mean if you give it in one lump sum. Sorry if thats a stupid question.


2) Second home - If a parent owns a second propety and their child has been living here, under what circumstances can the apartment be given to the child tax free. E.g how long must the child be living there. This ties in with the first question. From reading the Indo it seemed that a home could also be given to them free of CAT and it would not affect the €225k lifetime threshold above - or does it?

3) €3000 a year - I get from reading this that this does not apply to parents to children and applies from anyone to anyone, so techincally one could receive 10x or any amount of €3000 gifts from different people in a year with no CAT liable? Am I missing anything here?

4) Gifting Apartment to Child - So if the parents were selling their house and got lets say €400k for it. The bought a small house for €200k and they bought an apartment for €150k and the kids moved into the apartment.
Are the parents better off buying the apartment in their name and then transferring to their kids? How long must the kids be living in the apartment to do this, and by doing it this way are they saving the lifetime threshold of €225 for actual cash gifts?

5) Child to parent threshold - If the need for a child to gift a parent arouse, what is the threshold here?

In other words if they gave their child €150k to buy the apartment, it would be using up the €150k of the €225??

Or have I got this all wrong and you can have €225k only per lifetime, no matter if its a home or in cash. I am sure I will have more questions but your replies would be greatly appreciated. Thank you for your time. I would also like to point out I have searched and read through some older threads but none dealing specifically with these questions and none quiet recent.
 
For some reason the gift of a dwelling in which the child has lived in for 3 years is exempt from CAT.
 
Hi JG0009,

There seems to be a lot of confusion around this at the moment with the recent utterances from the Revenue.

The threshold of €225k is indeed a lifetime threshold so an annual contribution of €25k would sum up over the years and be taxable once it exceeds €225k.

If you are in a position to plan the contributions over a number of years then you could gift €3k per parent to child per year (€6k per year for two parents) and drip feed over a number of years.

With regard to the the tax exemption for dwelling houses, as long as your child has been living in the house for at least three years before they inherit it (the article also states there may be other conditions so worth checking out in more detail) they should not have to pay any inheritance on the property.

Brendan posted this link on a related topic which should be of use to you:

http://www.revenue.ie/en/tax/cat/leaflets/cat10.html

He also made this important point around Capital Gains Tax (my clarification in brackets).

While she (the child who received the house) will be exempt from CAT, if the house has gone up in value between the time you bought it and the time you gifted it, you will be liable for Capital Gains Tax at around 33% on the gain.


All the best.
 
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