Brendan Burgess
Founder
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A small gift exemption of €3,000 applies to a gift, taken from any one giver in a calendar year.
So you can receive a gift from a total stranger of €3,000 on 31st December and a further gift of €3,000 on 1 January the following year. You pay no CAT and you don’t have to declare it. Nor does it affect your threshold for CAT.
From the Revenue Guide
1.2 Small Gift Exemption.
In addition to this €225,000 tax-free threshold, the first €3,000 of gifts to a child in any
year is exempt from CAT under the annual small gifts exemption. This means that
each parent can give a gift to a value of €3,000 to a child (or to anyone else) each
calendar year without any CAT charge arising. So, two parents can make gifts to a
child to the value of €6,000 in any year free of CAT. Indeed, two parents could, if
they wished, gift €12,000 in total each year to each son or daughter and their
respective partner (e.g. fiancée, fiancé, daughter-in-law, son-in-law) free of CAT.
There is no obligation on a beneficiary of a gift to spend it in the year it is received.
Gifts can be accumulated by the child after receipt to meet future expenditure e.g. to
meet a deposit on a house.
Gifts which qualify for the small gifts exemption do not reduce the parent to child tax–
free threshold of €225,000 – gifts in excess of the small gifts exemption reduce the
threshold after taking the exemption into account.
There is no age limit
A parent can give a gift to a 5 year old as long as it passes to the ownership of the 5 year old.
The ownership of the money must clearly pass to the recipient e.g. into their bank account
What if I get a gift of €10,000?
Is the first €3,000 exempt and only €7,000 is assessable?
So you can receive a gift from a total stranger of €3,000 on 31st December and a further gift of €3,000 on 1 January the following year. You pay no CAT and you don’t have to declare it. Nor does it affect your threshold for CAT.
From the Revenue Guide
1.2 Small Gift Exemption.
In addition to this €225,000 tax-free threshold, the first €3,000 of gifts to a child in any
year is exempt from CAT under the annual small gifts exemption. This means that
each parent can give a gift to a value of €3,000 to a child (or to anyone else) each
calendar year without any CAT charge arising. So, two parents can make gifts to a
child to the value of €6,000 in any year free of CAT. Indeed, two parents could, if
they wished, gift €12,000 in total each year to each son or daughter and their
respective partner (e.g. fiancée, fiancé, daughter-in-law, son-in-law) free of CAT.
There is no obligation on a beneficiary of a gift to spend it in the year it is received.
Gifts can be accumulated by the child after receipt to meet future expenditure e.g. to
meet a deposit on a house.
Gifts which qualify for the small gifts exemption do not reduce the parent to child tax–
free threshold of €225,000 – gifts in excess of the small gifts exemption reduce the
threshold after taking the exemption into account.
There is no age limit
A parent can give a gift to a 5 year old as long as it passes to the ownership of the 5 year old.
The ownership of the money must clearly pass to the recipient e.g. into their bank account
What if I get a gift of €10,000?
Is the first €3,000 exempt and only €7,000 is assessable?