Paying Niece's College Accommodation-

N

NewRoss

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Thanks in advance!
Hopefully my niece will be successful tomorrow! My sister will not be in a position to finance her going to college so I would like to help out. If I pay my nieces college accomodation what would be the tax implications for me and her?
Does this come under the €3,000 per year gift heading and does it have to be notified to Revenue?
I would like to help out but my funds are limited too (I'm able to give up to €4,000) so therefore it needs to be in the most efficient way possible.
Any advice appreciated.
 
Check to see if the fees to the college are tax deductible. As far as I remember when I was applying for my tax back on college fees before I remember reading that if you paid fees for someone else(family) you could get the relief.
 
Fees are not tax deductible unless you are paying college fees for more than one person.

If you pay her accommodation, the first €3k per annum comes under the "small gift exemption" and so is ignored for capital acquisitions tax (so if you haven't given her anything so far this year, best to give her €3k before the end of the year). Any excess uses up some of her Group B threshold of €30,150. There is no obligation to make a return unless she receives a gift/inheritances that brings her over 80% of her threshold.
 
Hi NewRoss,


From your point of view there is no requirement to inform the Revenue. Nige has pointed out your niece's implications. As an aide memoir, just in case Revenue ever looked into this, you could make a note on your bank statement or email your niece saying that you're gifting her x amount and how it will be arranged.

On the Small Gift Exemption, it's important to note that your niece can avail of the small gift exemption on gift/s of up €3,000 from any other individual/s in the same year. For instance, if you had a spouse/partner and they gave her €3,000 in an individual capacity it would be treated separately to your gift and not taxed.

It's great to see this sort of generosity - hopefully your niece will get what she wants in college.
 
Depending on the definition of family and normal expenditure, the extract below from the following link may be of interest
http://www.revenue.ie/en/tax/cat/leaflets/cat1.html

Are there any exemptions from Gift Tax?

Yes. The main exemptions are -

.....
payments for support, maintenance and education of members of the family which are part of normal expenditure
.....
 
Ircoha,

As far as I can see, this only relates to parents, or persons acting in loco parentis or those qualifying for dependent relative tax credit (section 82 CATCA). Unlikely to apply in this case.

The wording in the Revenue Guide is a bit loose considering the legislation
 
Nige said:
Fees are not tax deductible unless you are paying college fees for more than one person.
Click to expand...

Don't want to hijack the thread but have you a link to this Nige? Had two kids at College last year and had to pay full fees and accomodation for both. Didn't realise that fees were tax deductable
 
I'm in situation this year where I'll have 2 in college. Can you confirm if I'm reading it correctly for the tax reflief?

student 1 costs me 2750 in contribution
student 2 costs me 2750 in contribution

total 5500euro

relief will be at rate of 20% for the 2nd student (ie 550euro)?

thanks
 
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