My Grendparents are looking to move into a Bungalow and a family member is going to fund the cost difference with their current home, will be €40-50k most likely. Would there be any tax implications with doing this?
A gift to parent from child falls under Group B, so 32,500 each. However, this is a lifetime allowance, so if they've ever received a gift / inheritance from a Group B relative in the past, the full threshold might not be available.
The first 3k per annum gift is tax free under the small gifts exemption. So they could gift grandparents 3k each without impacting thresholds.
Here's a very similar scenario that explains it well, including how the child & their spouse (group C) could jointly make the gift up to 109k with no tax due.
Hi, I have a question on logistics of gifting cash to my parents. If my current understanding is correct my parents fall into Group B for CAT threshold which is 32500 Euro per parent? My parents have a joint bank account, can I transfer 65000 Euro to this account with both of them claiming...
Or just lend it to them and write off €3-12k per annum depending on the number of people.
Or take a share in the property as tenants in common if you want the money back. If there’s no bank involved, you can slice it and dice it anyway you like.
Legally, it's very straight forward. But a few things come to mind to watch out for:
- The grandparents will not be the sole owners of the home. This would affect their ability for example to access the fair deal nursing home loan in future.
- The person who owns X% of the home will be subject to capital gins tax on their share in the future.
Gift them the loan, if that's what's wanted to be achieved (there are a few ways to do this). Or write up a loan agreement that there's a loan of X to be repaid from the estate after the death of both parents, so they get the money back without being subject to inheritance tax.