Small Gift Exemption from CAT

C

Cashman

Registered User
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Hello Guys,

I am seeking some clarification on the above - basically as how it actually works in real life.

Read online the overview as being:

Small Gift Exemption. You may receive a gift up to the value of €3,000 from any person in any calendar year without having to pay Capital Acquisitions Tax (CAT). This means that you may take a gift from several people in the same calendar year and the first €3,000 from each disponer is exempt from CAT

By way of example - could i open a joint account with my Grandson & lodge up to €6000 (€3000 from my wife & €3000 from me) annually into it - without any gift tax liability on him.

This could show the lodgement dates for clarity on annual dates.

However, I could then take it back if it was a joint account.........

How does this work?

Any advice would be most appreciated.

Thank You
 
Yes you can give your grandchild €6k p/a from you and your wife as it a gift that will not incur CAT.

You should not set up a join account for the purpose of doing so. If you pass away after 10 years of this and there is €60,000 in the account, a portion of the €60k will be viewed as part of your estate.

I do not think you should be giving away money that you may need in some time in the future.
 
David,

Thank You - you have really hit on my lack of understanding.

I have seen that specific insurance companies have a type of "policy" in the name of the child only that the money from €10 to €6000 in the case of a couple can go into.

The reason for my question of a joint account was your summary - what if i badly needed some at a time in future - i could take it from the joint account - my personal taxes have already been paid on it.

But if its through an insurance company in the name of the grandchild only - i am stuck.......

There must be a clean, legal way around the CAT

Thanks
 
If you want to be able to take the money back, don't give it to your grandson. Keep it yourself. What if he spends the money? Then you'd be stuck!
 
Good point - but he is only 4 years of age & I didnt plan on telling him or his parents.

It would just be an amount of cash not subject to CAT when we passed away.

Basically efficient tax planning
 
If someone is wealthy enough to want to think about tax planning for their 4 year old grandchild, they should be wealthy enough not to need the €6k back.
 
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