EUR 3,000 Small gift tax exemption

Are you making the most of it?

It’s nice to be able to help our grandchildren, nephews or nieces get a start in life.

Many people like to put a little money away for their loved ones so they have a lump sum waiting for them when they reach adulthood.

However, unless you think ahead there may be a sting in the tail as this gift could be liable to Gift Tax.

Anyone who receives a gift is liable to tax if its value is over a certain limit or threshold. Different tax-free thresholds apply depending on the relationship between the person giving the benefit (the donor(s)) and the person receiving the benefit (The recipient).

As of February 2017, these limits are : €32,500 for all gifts received from a grandparent, aunt or uncle , €16,250 for all gifts received from a non-relative The rate of Gift Tax is currently 33% (February 2017).

You may receive a gift up to the value of EUR 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 EUR 3,000 from each disponer is exempt from CAT.

Up to €3,000 a year can be received by anyone (e.g. child, grandchild, godchild, nephew etc) as a gift without giving rise to a charge to Gift Tax.

It should also be noted that this exempted amount can be received each year from any number of individuals.

So a Grandson could receive €3,000 a year from his Grandfather, and another €3,000 from his Grandmother, without incurring a Gift Tax Liability.

Those wanting to build up a fund for a loved one can also use this annual exemption to help reduce potential future Gift Tax.

Want to know more? We are available to discuss your options, and we look forward to hearing from you.

Our job is to help you choose a product and structure that will help you meet your goals.

telephone | 091441188 and/or email | office@nelsonlife.ie

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