€3k p.a. to kids - is there detailed guidance?

J

JimmyB99

Registered User
Messages
391
We've two kids.
One is in college whereby fees, accommodation and living expenses probably circa €18k p.a. and the other is now post-masters, working for a minimal wage/gaining experience in the not-for-profit sector to the extent that he needs some help with living expenses for the next while - say, €10k p.a.

My question is at what stage does money given to children to support their formal/informal education/career development switch to being more properly deemed a "gift" subject to the annual limits, etc.
 
I think , if they are classified, as dependents, you can support them, within reason, without any tax implications. You just need to keep records of rental payments, etc and , if audited, you/they can, reasonably explain any payments as parental support for a dependent. Once the child is working for a wage, it becomes a little more opaque. However, I would imagine that any auditor would accept your explanation, that this is normal parental support for a child in transition, earning a minimal wage and still, effectively dependent on their parent. Again, just keep a record of all transfers, and relevant costs.
 

Exemption for support, maintenance and education payments

Income or gains that are exempt from CAT
www.revenue.ie www.revenue.ie

This might be helpful. So your student child might be covered, and each adult can give 3k a year under the small gift exemption, so that could potentially be 6k a year towards the working child. It doesn't seem like there is a career development exemption beyond time spent studying. So in theory you are eating into the lifetime threshold at the rate of 4k a year for hopefully a short time.
 
JimmyB99 said:
working for a minimal wage/gaining experience in the not-for-profit sector to the extent that he needs some help with living expenses for the next while - say, €10k p.a.
Click to expand...
That's a heck of a lot of help to someone who has had a fully paid education and is in paid employment. Would you not think it better to hold off to help them on the property ladder?

You and your spouse can give 3K each to them tax free. So 6K now and 6K in January. You should keep a paper trail of it.
 
Ah, Google shows me that I did one 10 years ago.

FAQ - Small gift exemption from CAT

A small gift exemption of €3,000 applies to a gift, taken from any one giver in a calendar year. So you can receive a gift from a total stranger of €3,000 on 31st December and a further gift of €3,000 on 1 January the following year. You pay no CAT and you don’t have to declare it. Nor does it...
www.askaboutmoney.com

www.irishtimes.com

Teasing out what is allowed under the €3,000 small gift exemption ... and what is not

The ability to give someone up to €3,000 in a year with no tax implications for either party is potentially a very useful tax relief
www.irishtimes.com www.irishtimes.com
 
If an adult child in their early to mid 20’s are in full time education, whether it is a degree or masters then being supported in living expenses by their parents is not giving them a gift, it is supporting them while they are students.

A PhD is different, the candidate is normally paid (not a great amount) but they are no longer a full time student so I would think supporting them through this after the age of 25 would be problematic. If my adult child felt their career path was doing a doctorate I might be inclined to inquire how they plan to fund this. Perhaps through applying for academic grants etc. if they are that good they will get the grants. If the child continues to live at home it is less problematic but abroad is I think something they should be self funding
 
Clamball said:
If an adult child in their early to mid 20’s are in full time education, whether it is a degree or masters then being supported in living expenses by their parents is not giving them a gift, it is supporting them while they are students.
Click to expand...
I've put up the link to the correct details on the Small Gift tax thread.
 
You must log in or register to reply here.
Back
Top