"Gifting":is there a tax beneficial way for me to help out my parents?

A

aloleary

Registered User
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Hello,
I have herd the term gifting used plenty of times and usually in a scenario of parents gifting to thier kids to help them out...

Just wondering if it works the other way... I am in a position now where I can help out my parents (for all the money they funnelled into me) by paying them back...

However was wondering is there a way for me to "gift" this money or some such tax benificial way of doing this ???

Any help/info appreciated.
Regards
-al-
 
You may be able to covenant them the money-the criteria are outlined in the [broken link removed], but are quite restrictive.

Otherwise, anyone can receive a gift of up to €3,000 per annum without tax implications-I'm not sure if the €3,000 goes towards the lifetime thresholds for CAT purposes.

For larger sums, the CAT threshold for your parents is nearly €50,000, but this can be increased to nearly €500k in certain circumstances.
 
CCOVICH said:
-I'm not sure if the €3,000 goes towards the lifetime thresholds for CAT purposes.
Click to expand...

I am pretty certain that it does not go towards the threshold and is therefore a handy way of removing cash from any ultimate inheritance or larger cash gift and is a valid way of saving on C.A.T.
 
Graham_07 said:
I am pretty certain that it does not go towards the threshold and is therefore a handy way of removing cash from any ultimate inheritance or larger cash gift and is a valid way of saving on C.A.T.
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It looks that way. From www.revenue.ie


"Under the provisions of Section 69 of the Act, the first €3,000 of the taxable gift is exempt from tax. The exemption does not apply to an inheritance. The exemption is limited to one gift per disponer in a calendar year. In effect a beneficiary can take €3,000 from the same disponer in different calendar years and these gifts will be exempt from CAT. A beneficiary can take gifts from several disponers in the same calendar year and the first 3,000 of each of these gifts will be exempt."
 
where did you see that (3000) mentioned.. ?

I see:

[broken link removed]

ARE THERE ANY EXEMPTIONS FROM GIFT TAX?
Yes. The main exemptions are -
* the first £1,250 of all gifts taken by a donee from one disponer in any calendar year after

Just would like to find the document that mentions the 3k figure for my records
 
You'll find it here on page 2 of the Institute of Taxations "CAT for the layperson"
 
Does this change if you are "paying them back".

Say money was give by the parent to the child over a number of years (or in one lump sum) without any expectation at the time of it being paid back and evidence was available of this and then subsequently the child came into some money. Upon coming into this money the child decided to transfer some money back to the parents. Could the money be netted of any consideration paid by the partent to the child before the application of CAT resetting the clock so to speak?
 
rossm said:
Does this change if you are "paying them back".

Say money was give by the parent to the child over a number of years (or in one lump sum) without any expectation at the time of it being paid back and evidence was available of this and then subsequently the child came into some money. Upon coming into this money the child decided to transfer some money back to the parents. Could the money be netted of any consideration paid by the partent to the child before the application of CAT resetting the clock so to speak?
Click to expand...

Of course it could...you just have to do up the relevant loan notes and keep a record of it.
If the amounts you're talking about are large it would pay to get professional advice but your theory is sound.
 
aloleary said:
where did you see that (3000) mentioned.. ?

I see:

[broken link removed]

ARE THERE ANY EXEMPTIONS FROM GIFT TAX?
Yes. The main exemptions are -
* the first £1,250 of all gifts taken by a donee from one disponer in any calendar year after

Just would like to find the document that mentions the 3k figure for my records
Click to expand...

I found it in [broken link removed] see page 25 in the document.
 
If your parents have medical costs you can pay their costs and you can receive tax relief at the marginal rate of tax. If parents are disabled, live with you or next door you can get VAT, VRT, Car tax and some vat on fuel back if you buy a slightly altered car for transporting them (subject to certain restrictions/provisions).
 
You could buy their house from them (if they were agreeable to it).

They'd have no capital gains tax (principal private residence relief). If you didn't pay full value, then you'd be the one receiving the gift but the threshold for children is just under a half million.

You would then be giving them an annual gift by letting them live in the house tax free, but this might be covered by the €3,000 per annum annual allowance.
 
I thought the gift tax between parents and children was alot higher i.e. 300k or thereabouts....
 
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