Making a gift of cash

J

Joey

Guest
Hi,

I would be most obliged if anyone would be kind enough to comment on the following question.

I have 80k that I want to give to my son and daughter (a sibling passed on leaving me some cash).

If I just give them the cash are there any tax implications for them receiving it?

If so what is the best legitimate way to pass on the cash.

Thanks,

Joey
 
> If I just give them the cash are there any tax implications for them receiving it?

Yes. Gift tax could be an issue although there are generous exemptions for gifts between family members. See here:


[broken link removed]

> If so what is the best legitimate way to pass on the cash.

The sum that you mention should be well within the relevant parent to child gift tax exemption limit so gifting it should be the most tax efficient way to transfer it.
 
CAT

My understanding is as follows (but I'm not a tax expert):

If you just give them the cash in a lump sum (say €40k each) it will fall below the threshold for capital acquisitions tax (CAT), which is €456,438 for a son/daughter at present. However, if they later inherit or are gifted more money from you, this will be added to the €40k given now in order to see how much of the cumulative sum received is over the threshold.

However, you can give them €3,000 per year outside the tax system (i.e. it doesn't contribute towards the cumulative sum received that brings them closer to the threshold).

So if they don't actually need a lump sum now, it would be more tax efficient to give them €3,000 p.a. each on an ongoing basis - or maybe depending on your age/their age, some of the money as a lump sum now and the rest as €3,000 pa in subsequent years.
 
CAT

> However, you can give them €3,000 per year outside the tax system (i.e. it doesn't contribute towards the cumulative sum received that brings them closer to the threshold).

Are you sure about that? Do you know what rules govern this?
 
Re: CAT

Hi Joey - Are you certain that your future needs are covered, before you go handing off the money? Most people underestimate the money that they will need for retirement, particularly if long-term care is involved.
 
annual small gift exemption

Afaik it's usually referred to as the 'annual small gift exemption' or similar.

It's mentioned in the [broken link removed] (see first bullet in last section), but the figures are a bit out of date; it recently went up from €1,250 to €3,000.

For more technical detail, see [broken link removed].
Part 9: Exemptions... Section 69: Exemption of small gifts
Page 99 on printed page (or p.101 on screen pdf)
 
Gift of cash

Myself and my husband received €75K cash as a gift from a parent last year. My parent is declaring it as a gift this year. Do I actually need to do anything or is the fact that my parent is declaring it sufficient as they're is no tax payable? I have never received any gift before.

Thanks

Sam.
 
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