Gift tax - Gift to parent

The threshold from parent to child ( Class A ) and the threshold from child to parent ( Class B ) are different. ( except in case of say, death of the child and parent inheriting ) . You could however gift her €3,000 pa in any year without eroding her threshold so that might be a way to give her the €50,000. Give her the threshold amount and make the balance up from the SGE amount this year and next year. Bear in mind that if she has already had any gifts or inheritances from Class B disponers already then CAT would fall due on this gift from you.
 
Does this mean the most I can give her this year is €3000?

I rang the tax office and the guy there told me he didn't have the figures there so I needed to check the website. He did say that if it's a private loan it's not taxable?
 
Indexed Thresholds for Capital Acquisitions Tax - 2009

For the purpose of Gift and Inheritance Tax, the relationship between the person who provided the gift or inheritance (i.e. the Disponer) and the person who received the gift or inheritance (i.e. the beneficiary), determines the maximum tax free threshold - known as the "group threshold".
The indexed Group thresholds for 2008 and 2009 are set out in the table below
The indexed group thresholds for 2008 and 2009 GroupRelationship to Disponer Group Threshold 2008
Group Threshold
from
1 January 2009
to 7 April 2009 Group Threshold
from
8 April 2009 ASon/Daughter€521,208€542,544€434,000BParent*/Brother/Sister/
Niece/Nephew/Grandchild€52,121€54,254€43,400CRelationship other than Group A or B€26,060€27,127€21,700
*In certain circumstances a parent taking an inheritance from a child can qualify for Group A threshold.
Historic CAT Rates and Thresholds

According to the revenue site the threshold for a gift from a son/daughter to a parent for 2009 is €43,400. This is in addition to the yearly €3,000 tac free allowance.

As Graham07 has said, this is the maximum cumulative gift that can be given.
 
chewchew said:
Does this mean the most I can give her this year is €3000?
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No you can give her the threshold amount ( again assuming no previous gifts or inheritances from a Class B person ) so that's €43,400 plus the SGE of €3,000 . Essentially you give her a gift of €46,400 of which the €3,000 is discounted as the SGE leaving her with €43,400 as the chargeable gift. Her threshold covers this so no CAT. Also note though that a CAT return must be filed where 80% of the threshold is exceeded, even if no CAT is ultimately due. This puts Revenue on notice that the person has used a substantial portion or all of their threshold.
 
Thanks guys.

So if I were to give her the full €43,400 I would have to fill in a CAT return? How would this affect any other money that my mother may receive? For instance if she were to receive some inheritance in 12 months time would this affect it?

For what it's worth this money is a loan, does that change the situation? The guy I talked to on the revenue support line said something about private loans not being a matter for the revenue commissioner. Can anyone shed some light on that?
 
As I understand it loans to be repaid in full with interest are of no concern to Revenue, whether private or not.

However, if the loan is interest free, then there could be an element of Gift involved, i.e the value of the interest that would have been paid if the loan had been obtained from a bank.

So Gift tax would apply when the interest value exceeds the threshold, and that could take a few years to accumulate.

Other gifts or inheritances taken by your mother will not be affected by any gift you make to your mother, unless she takes another gift or inheritance from anyone in the same threshold (Group B).
 
4th estate said:
As I understand it loans to be repaid in full with interest are of no concern to Revenue, whether private or not.

However, if the loan is interest free, then there could be an element of Gift involved, i.e the value of the interest that would have been paid if the loan had been obtained from a bank.
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I would imagine it will be paid back within 2 years, most likely in one lump sum. I would like to give her an interest free loan of course :)

I'm sure the value of the interest accrued in 2 years would be much less than the gift tax threshold, in this case would I need to inform the tax office of the loan at all?
 
chewchew said:
I would imagine it will be paid back within 2 years, most likely in one lump sum. I would like to give her an interest free loan of course :)

I'm sure the value of the interest accrued in 2 years would be much less than the gift tax threshold, in this case would I need to inform the tax office of the loan at all?
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No. Unless the value of the interest foregone exceeds 80% of the Class B threshold. And you have to take into consideration any other gifts or inheritances she may have taken in the past from anyone in Class B. The thresholds are a lifetime amount, so the more you take from that Class, the more your tax free threshold is eaten up.

But if this is the first gift/inheritance from Class B, then you will know yourself if the interest exceeds the 40 odd thousand allowed. Once the value of the gift is LESS than 80% of the threshold, you do not need to inform Revenue.
 
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