CAT - gift for house purchase

L

LocationStation

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Looking to confirm if my thinking is correct here.

We are in the fortunate position that my Father is going to gift my wife & I €20k for a house deposit.

We do not want to structure as a loan so that is off the table for various reasons. It is a gift.

I am thinking the best way to view this from a tax perspective is as follows:

- €9k being 3x small gift exemptions (€3k me, €3k wife, €3k our child)
- €11k being a gift to my wife (below €16,250 threshold C limit).

This would mean my cat A threshold is not impacted and no CAT due now or at time of future inheritence.

1) Is my thinking correct or am I getting this wrong? Want to ensure this is all above board.
2) If the €20k is paid into our joint bank account in one payment, do we need to document the above via letter or something for future refernence with Revenue?

Appreciate any input.
 
It all sounds ok apart from the €3K to the child. You would need to keep that for the child and not use it as a mechanism to get a tax free €3K gift for the parents. If your mum is able to give both you and your spouse €3K each, then that would be €12k small gifts, and the remaining €8K gift to your wife is tax free as you said. Your Dad and Mum can use the same source of funds.

A signed note between you would be sufficient to record as a gift.
 
Clamball said:
It all sounds ok apart from the €3K to the child. You would need to keep that for the child and not use it as a mechanism to get a tax free €3K gift for the parents. If your mum is able to give both you and your spouse €3K each, then that would be €12k small gifts, and the remaining €8K gift to your wife is tax free as you said. Your Dad and Mum can use the same source of funds.

A signed note between you would be sufficient to record as a gift.
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Thank you.
 
One more thing that I am unsure on.

Should the €3k exemption be included or excluded when assessing if the 80% threshold for filing has been reached?

So, for example, if €16k was gifted to a cat C in one year, €3k small gift and €13k gift, is it the €16k or the €13k that one should use to assess the 80% filing requirement? €13k would not, €16k would.

Want to ensure all necessary filings are made if required.
 
Are you too late for tax year 2023. Because I'd be structuring it

2023
2K from mother to you
2K from father to you
2K from mother to wife
2K from father to wife

8K

2024

3K from mother to you
3K from father to you
3K from mother to wife
3K from father to wife

That's 12K


If that's not allowed, I'd take 12K in 2024 and 8 k in 2025.
 
That doesn't answer the question if the gift can be backdated to 2023 for tax purposes.
 
T McGibney said:
False accounting and tax evasion are both serious criminal offences that could land the perpetrator in prison.
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While this is strictly speaking a factually correct statement, it's factually correct in the same way as me saying that not wearing your seat belt to drive half a mile down the road once could get you killed. It could, but it almost certainly won't.

Alas, you would do well to get yourself a (not fully suspended) custodial sentence for tax evasion in Ireland if you tried...

Only one of the 19 individuals convicted of indictable (i.e. the most serious) tax evasion offences in 2023, didn't have their custodial sentence fully suspended - many didn't even receive a custodial sentence in the first place. https://revenue.ie/en/corporate/press-office/revenue-prosecutions/index.aspx?year=2023

To describe the actual consequences of serious tax evasion (in the tiny minority of cases that ever get prosecuted), as a slap on the wrist would frankly be offensive to aficionados of the noble art of wrist-slapping...
 
Well in a really hypothetical situation where someone wanted to give me 20K I'd be backdating 8K of it to 2023. Which is good tax planning in my book.
 
torblednam said:
While this is strictly speaking a factually correct statement, it's factually correct in the same way as me saying that not wearing your seat belt to drive half a mile down the road once could get you killed. It could, but it almost certainly won't.
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6 or 7 years ago a lad followed the same logic, relabelling garlic as apples, and got a long stretch in prison.

In my work as a professional advisor, I consider that it is my primary duty not to do or say anything that could even in theory land any of my customers in prison. That includes refraining from the aiding or abetting of the making of a false tax return.

On this forum, although the stakes are rather lower, I apply the same principle regardless.

Others can make their own minds up on that score.
 
You can't backdate a gift - if you were given a gift on Jan 1st you can't pretend you got it on Dec 31st

Of course, as there is no obligation to document small gifts, I have no doubt that a certain amount of "backdating" occurs all the time

This is a self regulated process for most of the time but if Revenue did query the source of funds, and you don't have proper documentary evidence, I suspect you could be in trouble
 
Take a gift of 12000 euro in 2024 and an interest free loan of 8000 euro.
Take a gift of 8000 euro in 2025 and then at your leisure start to clear the loan.
 
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Gordon Gekko said:
No, it’s dishonest, immoral, and illegal.
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Well I'm not really into the morality of it really. More into the practicality of how an ordinary parent helping their child can go about it as best they can. There are far bigger things to worry about as regards dishonesty like pension raids by government (Michael Noonan) or immoral actions of revenue in chasing some things (see UK HMRC actions as regards taxation of child allowance) than I can be bothered about a parent putting 8K into 2023 instead of 2025. OP can make up their own mind as to their 'morals' on this situation. They have the advice now and can act accordingly.

Do you think parents should be taxed on paying 30K for a child's wedding?
 
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