Gift Tax - some nephews/nieces treated as sons/daughters?

W

winston smit

Registered User
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18
Hi all

I'm wondering if you could help me with a quick query regarding gift tax. I'm going to contact revenue but I wouldn't mind some direction from posters here beforehand.

In the leaflet from revenue on gift tax it says "Certain nieces and nephews will effectively be treated in certain circumstances as daughters and sons", thus increasing the threshold permitted before tax is applied. Would anyone have any idea what these circumstances might be?

Situation I'm curious about is an uncle who has gifted a site (without planning) to a niece. The uncle has been recently widowed and is without children of his own - niece has and is genuinely very good to him, effectively a daughter! She doesn't and hasn't looked for anything from him but I'm just curious - if she does accept this site, will she or he be liable for tax? Or Would a situation like this fall into the category mentioned by revenue?

Many thanks in advance.
 
Re: Gift Tax

The "favourite niece/nephew" relief which grants the child threshold to the niece or nephew only applies where the niece or nephew works with their aunt or uncle and the assets they receive are business assets.

This relief does not apply in your case and so, presuming the site to be transferred is worth more than the Group B threshold (49k), gift tax will apply. If the uncle has a CGT liability on the transfer of this site, that CGT may be offset against the CAT applying.
 
Re: Gift Tax

Only way you could get around it is if the niece lived with her uncle for 5 years prior to her 18th birthday in which case she would qualify for foster child relief and effectively come in under bracket A. She would have to get documents to prove this however!! :)
 
Re: Gift Tax

Zion she would not qualify as a foster child as she is a connected party.

Nige is right, Favoured nephews/nieces only come into play where a going concern exists.
My recommendation would be to split the site into two agriculture sites (have your got a valuation on the site yet?) It's unlikely not possible that you may be able to obtain a low valuation for the land, €6,000 (unlikely, I know!!)

If you did get this sort of valuation split it in two, creating two gifts of €3,000 then get the uncle to gift the niece half and someone else half who in turns gifts that half to the niece.

This will result in stamp duty costs though....
 
Re: Gift Tax

Get professional advice. You are wasting your time asking or expecting Revenue to assist you in minimising your or your uncle's tax liabilities. Btw some of the above "advice" is a mile wrong, particularly the "recommendation" in the most recent post.
 
Re: Gift Tax

Iceman732 said:
Zion she would not qualify as a foster child as she is a connected party.
Click to expand...

Iceman,

Sorry to disagree but I know from personal experience that if she was able to meet the guidelines I listed above, then she definitely would qualify as a foster child. Fact.

Zion
 
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