Compassionate payments from Middle East employer, following death of Employee

[fayf]

I wonder would anyone point me in right direction on this quite unusual circumstance.

One of my best friends passed away recently, they worked in the Middle East, and their employer wants to make compassionate payments for the specific purposes of his surviving children’s education.

His surviving partner, based in Ireland, is unclear on how to handle this and neither am i, the exact amounts are currently unknown, but they maybe in the region of circa €2 k per month over a period of time, split between 2 children, my initial thoughts were, if these payments are made directly to the children rather than the partner, this may be helpful tax wise when they declare the payments, as they are only working partime time as 1 is in 2nd year of college(over 18), and the other is still in 2nd level(under 18)

 

[DannyBoyD]

Very sorry for your loss.

I wonder would a lump sum payment be better? More like 'Death-in-Service' for tax purposes?

Also, from the sounds of it, this is more in the region of a compassionate payment rather than statutory.

Managers change, companies get sold / go bust. Bird in the hand and all that.

IANATE

 

[Bronte]

Sorry for the sad circumstances. I'd recommend trying a UK forum to see if this situation has occurred. Secondly maybe the employer's HR department would be helpful.

I wonder would a lump sum payment be better? More like 'Death-in-Service' for tax purposes?

That might work, but there's another issue. If an employer has committed to paying this monthly until education finishes, there's always the possibility that in 2 years time they stop, or the company is taken over, so a lump sum might be a better option.

 

[Steven Barrett]

This is a complex cross boarder tax issue. You should seek expert advice on the matter.

 

[HappyLuck]

Hi,
Maybe estimate the total amount and split it as a lump sum & gift it to each child, this could allow €23k per child tax free assuming no other category c gifts. The widow could also get €23k as well if total gifts were to exceed €46k. Just a thought.

 

[fayf]

Thanks, have referred them to an international tax expert