NO MORE GIFTS

At the moment if a parent wants to make a gift to a child or provide for them if they are in difficulties, they can do so because the threshold before tax has to be paid is at the moment €224,000.

For instance where a couple are engaged and they are going to a buy a house together, it’s not unusual for parents to help with the funding of a deposit on a new house or to help pay off student loans or provide other financial help.

Although we are told that government finances are better than they have been for very many years, there is a provision in the current Finance Bill before the Dail which would limit the exemption from gift or inheritance tax to people under the age of 18 or 25 if they are in full time education.

What this means is that if your son or daughter is getting married and you give them €50,000 to help towards buying a house or give them a lump sum to cover anything else then tax would have to be paid at the rate of 33%. If a parent decides to leave a property to a child or, heaven forbid, buy a property for a child, then the child may have to sell the property in order to pay the 33% tax on it.

This is a fundamental change in the tax system as it applies to families and quite extraordinarily it is receiving almost no attention in the media. The provision however is still contained in a Bill and has not yet been enacted.

Kevin Brophy
Brophy Solicitors
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