Is my wife liable for CAT for gift that my parents given to me

A

anon473

Registered User
Messages
66
I have a question that has come up from another thread
http://www.askaboutmoney.com//showthread.php?t=88454
dave34 said:
I recently got planning on a site given to me by my father, i now need to get the land signed over to my name. am i right in thinking this will be tax free as this is my only gift from him? Im not married but obviously me and my girlfriend will be getting a joint mortgage. does that mean she could be viable for tax? any advice welcome.
Click to expand...

It appears from the above thread that the OP's girlfriend may be liable to some CAT tax because she will be joint owner of the site/house (that was gifted to the OP from his father). This makes sense to me since she is gaining materially from the gift.

I was given a lump sum from my father (well below the exemption levels for father-child gift) which i lodged into our joint bank account. This money is earmarked for a house renovation that we will obviously both gain from (married and joint owners of house). Does this mean that she has some liability? Would I have some liability if my wife was given a gift from her parents?

I have looked at the revenue site and cant really see anything definitive. If we were taxed separately with separate bank accounts would that make a difference (too late now anyway!)

Anybody come across this before or am i making things more complicated than necessary.

Anon473
 
If the gift was made directy to you what you have decided to do with the money is insignificant. If you father made a cheque to you as a gift for you and you are under the limits then there is no further liability.
 
anon473 said:
...
Anybody come across this before or am i making things more complicated than necessary.

...
Click to expand...
I think so. The money was gifted to you, how (or even if) you divide it with your spouse is irrelevant. "Whats mine is your's and whats your's is mine" within a marriage, AFAIK.
 
You can look at it as two CAT transactions (i) gift from your father to you (under exemption limit so no CAT) and (ii) gift from you to your wife of half of the money (exempt as it's a gift between spouses). As your father gave you the money, not to you and your wife jointly, then I don't think there's any CAT to pay. In the other example, whichever way you look at it *some* unrelated party is giving something to the g/f (i.e. the boyfriend) - the point is not that she gained materially from the gift (because your wife is doing so here too) but her relationship to the person who gave her the gift (in the other case, a boyfriend, in your case a husband).

There's another thread here but I don't agree with some of the posts myself. It seems even clearer in your case as you were the one that got the money (i.e. your father didn't give it to you jointly, like a house) and what you do with that afterwards is up to you.

Sprite
 
Section 8 C.A.T. Act 1976:


8.—(1) Where a donee takes a gift under a disposition made by a disponer (in this section referred to as the original disponer) and, within the period commencing three years before and ending three years after the date of that gift, the donee makes a disposition under which a second donee takes a gift and whether or not the second donee makes a disposition within the same period under which a third donee takes a gift, and so on, each donee shall be deemed to take a gift from the original disponer (and not from the immediate disponer under whose disposition the gift was taken); and a gift so deemed to be taken shall be deemed to be an inheritance (and not a gift) taken by the donee, as successor, from the original disponer if—

( a ) the original disponer dies within two years after the date of the disposition made by him , and

( b ) the date of the disposition was on or after the 1st day of April, 1975.

(2) This section shall not apply in the case of any disposition (in this subsection referred to as the first-mentioned disposition) in so far as no other disposition, which was connected in the manner described in subsection (1) with such first-mentioned disposition, was made with a view to enabling or facilitating the making of the first mentioned disposition or the recoupment in any manner of the cost thereof.
 
Hmmmm....

I'm not 100% clear on what subsection (2) means - it *seems* that, if the second (or third) disposition wasn't made with a view to enabling the original disposition, then all is ok. So if OP's giving of money to his wife is not intended to facilitate what was really intended to be a disposition from the father to the wife, then it falls outside the subsection?

Looked at as if subsection (2) doesn't exempt the gift, then there would be a very strange strangulation on all gifts between people - essentially no one could give a gift to someone else if they had received a gift in the three years prior (or three years thereafter for that matter) without all the tax implications being done over again.

My head hurts!

Sprite
 
Gift and inheritances between spouse are exempt so S8 does not apply.

As far as you and your wife are concerned there is no CAT liability for either of you based on the info you provided.

Section 8 is an anti-avoidance measure to prevent people from receiving gifts are different tresholds to try and avoid paying CAT. e.g

Joe gifts a house to his daughter Mary at treshold A €496,824

Mary then gifts the house to her daughter Anne one year later at treshold A €496,824

In that scenario, S8 would kick in and Anne is deemed to receive the gift from her grandfather Joe at treshold B €49,682.

Capice?
 
The Revenue Notes for Guidance on the CAPITAL ACQUISITIONS TAX CONSOLIDATION ACT 2003 addresses this point exactly (just found it today):

[Page 18]

"8 Disponer in certain connected dispositions

Summary
This section seeks to prevent tax avoidance by gift-splitting. Where 2 or more gifts are made by successive disponers within 3 years, the second or subsequent gift is deemed to have been made by the original disponer to the ultimate beneficiary. Genuine cases are excluded from the scope of the section.

Details
Where 2 or more gifts are made by successive disponers within a period of 3 years, the second or subsequent gift is deemed to have been made by the original disponer to the ultimate beneficiary.

Example: A gifts property to B. B gives it to C who, in turn, gives it to D. The gifts are made within 3 years. C and D are deemed to take their gifts from A.

The section does not apply where the second or subsequent disposition was not made with a view to enabling or facilitating the making of the first disposition or the recovery of the cost of that disposition."

Sprite
 
anon473 said:
I have a question that has come up from another thread
http://www.askaboutmoney.com//showthread.php?t=88454


It appears from the above thread that the OP's girlfriend may be liable to some CAT tax because she will be joint owner of the site/house (that was gifted to the OP from his father). This makes sense to me since she is gaining materially from the gift.

I was given a lump sum from my father (well below the exemption levels for father-child gift) which i lodged into our joint bank account. This money is earmarked for a house renovation that we will obviously both gain from (married and joint owners of house). Does this mean that she has some liability? Would I have some liability if my wife was given a gift from her parents?

I have looked at the revenue site and cant really see anything definitive. If we were taxed separately with separate bank accounts would that make a difference (too late now anyway!)

Anybody come across this before or am i making things more complicated than necessary.

Anon473
Click to expand...
Hi Annon, This may be the case if the transaction is carried out in a reckless way. It can be carried out in such a way that she doesn't suffer a tax liability. I am an Associate of the Irish Taxation Institute so I have experience in this.
 
scooterguy said:
Hi Annon, This may be the case if the transaction is carried out in a reckless way. It can be carried out in such a way that she doesn't suffer a tax liability. I am an Associate of the Irish Taxation Institute so I have experience in this.
Click to expand...

The transaction has already happened. Are you suggesting that things may change based on what Anon spends the money on? I think this thread has gone into some detail on why the gift to Anon and Anon's subsequent lodgment of the cash into a joint account does not attract CAT for his wife...

Sprite
 
You must log in or register to reply here.
Back
Top