Gift tax from an Irish resident to a UK resident

[Brendan Burgess]

This thread sparked this question. Is there a tax planning angle for Irish parents who have children in the UK, as many do have?

If a father gifts his son who is resident in the UK €300k, it does not appear to be subject to UK CAT.

But presumably it counts towards the thresholds when the father dies?

So what about an Aunt to a niece?

Let's say the Aunt gifts the niece €135,500. If the niece is resident in Ireland, the €100,000 in excess of the threshold and annual small gift exemption is taxed at 33%.

But what if the niece is resident in the UK. There doesn't appear to be any gift tax there?

Or is CAT based on domicile?

Brendan

 

[Brendan Burgess]

Ah, I see from a question in the FT that

"In Ireland, capital acquisitions tax (CAT) is payable if the donor (in this case, your stepmother) or the beneficiary is Irish resident, or the subject of the gift or inheritance is situated in Ireland, writes Susan Spash, partner at Blick Rothenberg."

So an Irish resident gifting money to someone resident in Saudi would mean that the person in Saudi would be subject to Irish CAT?

Brendan

 

[Gordon Gekko]

Yes.

Although the question of how Revenue collect it is a salient one!

 

[Sarenco]

Yep, Irish CAT applies where the disponer or the beneficiary are resident or ordinarily resident in Ireland.

UK inheritance tax, in contrast, depends on the domicile of the deceased person.

 

[Gordon Gekko]

Although there’s an important carve-out for non-doms in relation to their first five years here.

 

[john luc]

so if I send my sister who lives in the UK €103 K who is responsible for any tax due.

 

[Gordon Gekko]

so if I send my sister who lives in the UK €103 K who is responsible for any tax due.

She is

 

[Mags0709]

I have a related inquiry.

Say you are a UK resident and inherit a property in Ireland - paying CAT etc - and then place the proceeds from the sale in an Irish bank account. You then transfer the money from your Irish account to your UK account and give some/all of the money to a child who also lives in the UK.

Are you subject to UK tax rules on gifts - where the transfer happens - or Irish tax rules on gifts - where the funds originated from.

Does it make more sense to transfer the money in Ireland - using the 310k euro threshold on gifts to children - so you can double up on gift allowances (added to the £325k limit in the UK for non main property inheritances) if you die within 7 years of the gift?

 

[Joe_90]

If neither is resident in Ireland then the second transfer of cash should not come within the charge Irish CAT.