parent-child gifts and revenue reporting requirements

Discussion in 'Wills, inheritances and gifts' started by PaulM1, Dec 7, 2017.

  1. PaulM1

    PaulM1 New Member

    This article in the Irish times..

    "Grappling with confusion over tax on gifts from parents"
    (not permitted to post link but easy find with google)

    ..says that the child receiving the gift need only notify revenue when the sum total of gifts reaches or exceed 80% of the threshold (currently €310,000).

    The article is from 2015. Is this 80% reporting requirement still valid in 2017/2018 ?

    Many thanks
  2. Joe_90

    Joe_90 Frequent Poster

    Yes you are only required to file a CAT return when you reach the 80% threshold.
  3. Easel

    Easel Registered User

    Hi Paul,

    Yes, this is the advice our tax advisor gave us last month. If there is a large estate and you wish to minimise your tax liabilities I would recommend talking to a tax specialist. The main advise we were given was to utilise the €3,000 tax free per person per year. This will enable 2 parents to give a combined €12,000 to one of their children and their spouse per year tax free. If there are grandkids involved they can also receive a combined €6,000 per year from the grandparents.
  4. PaulM1

    PaulM1 New Member

    Thanks Joe_90 and Easel

    According to the Irish Times article, the yearly parent-child gift can exceed €3,000 per person and it still doesn't affect liability or reporting to revenue providing the 80% reporting rule is followed:

    "I can’t imagine who might have told you that you would automatically be subject to capital acquisitions tax and/or a declaration to the Revenue if you received more than €3,000 in a tax year and where they would have got such misinformation. The most generous interpretation I can put on it is that the person(s) was suggesting that you would come under the terms of the Capital Acquisitions Tax Consolidation Act, 2003.
    That much is true, but only in the sense that you have to consider how the gift is treated, not that you face any immediate liability or reporting requirement.
  5. noproblem

    noproblem Frequent Poster

    What's the story if a Dad wants to pay for his child's wedding? Does he just do it and stay shtum?
  6. Philip Slattery

    Philip Slattery Registered User

    I did find guidance on this a while ago. If parents pay for costs from the day of the wedding gift tax does not apply its is ignored. If they pay for anything else normal gift rules apply. So tell them to pay for the meal and band rather than the honeymoon and it should be fine.
    noproblem likes this.
  7. Gordon Gekko

    Gordon Gekko Frequent Poster

    Correct, a child’s wedding is fine.

    That was topical a few years ago when Section 82 (general support) was tightened up.

    Revenue clarified that in their view a wedding is fine.
    noproblem likes this.
  8. Prittstick

    Prittstick Registered User

    I understand about the 80%, before you are required to make a CAT return.

    But on Form 12 it says

    CAPITAL ACQUISITIONS IN 2016 77 - If you received a gift or an inheritance in 2016, insert X in the box(es)
    Note: Where the value of a gift or an inheritance, when added to the value of prior aggregable benefits (if any) received on or after 5 December 1991 within the same group, exceeds 80% of the relevant threshold, a Capital Acquisitions Tax return must be made.

    I am curious as to why Revenue want you to tick this box, even though you might only be at 10% of your threshold?

    Also, should you tick this box if you got 2,000 say, which is within the Small gifts limit?