# A gift from parent to unmarried couple - CAT?



## kilamangiro (13 Jan 2014)

My fiance and I have received a generous gift of €100,000 from her parents towards a deposit on our first home. 

Because we are not married, I'm wondering if €50,000 of that is deemed to be a gift from her parents to me (Category C) which would be over my allowed threshold and therefore taxable?

Is there a way around this? Perhaps a loan from my fiance to myself which could then be cancelled when we are married.

Due to our incomes it needs to be a joint mortgage, so no question of fiance purchasing the house on her own unfortunately.

Thanks in advance.


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## Bronte (14 Jan 2014)

kilamangiro said:


> Is there a way around this? Perhaps a loan from my fiance to myself which could then be cancelled when we are married.
> 
> .


 
Don't start down this road.  Go to an accountant and find out the best way to structure this gift.  This is not going to cost you a lot, a one hour meeting should do it.  Or one of the accountants on here will probably have the solution.  

Might be better if the parents gifted her an annual 3K which is I understand exempt etc.


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## mercman (14 Jan 2014)

You need to go to a proper practicing firm of Accountants who will give you the correct opinion. A public forum is not the place to get solid advice. The €3000 gift allowance can be given to you both ach year without any future problems. And that is 3000 from each parent to each person.


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## stephnyc (14 Jan 2014)

mercman said:


> And that is 3000 from each parent to each person.


 
so in as little as 8 years you have your deposit tax free! 

agreed - for 100K, get professional advice!


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## WizardDr (15 Jan 2014)

Would the gift not be from the Parents to the Son?
It cannot have been their intention to trigger a tax liability merely because they may appear to have given it to both ot you - whereas to the Son only would have had no tax.
Its up to them to clarify. Intention is key.


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## DMcL1971 (15 Jan 2014)

Sounds to me like her parents, though well intentioned, have done a very stupid thing. If her parents had given their daughter a gift of 100K, then that is completely tax free. She can then chose to use this as a deposit on a house. The remaining money required to buy the house would come from a joint mortgage between you and her.

 If her parents gave the money to both of you, then her 50K is tax free. The first 15,075 of your 50K is tax free. The remaining amount of 34,925 is taxable at a rate of 33%. Therefore they have cost you 11,641.66.


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## ladybird (16 Jan 2014)

http://www.revenue.ie/en/tax/cat/guide/gift-splitting.html

The second example.


The revenue see this all the time and have made provision for it.

Ring the CAT section and ask them for free. There is a very efficient staff there who are very knowledgeable and if you email them, they are very prompt and then you have written confirmation of everything.

HTH

Ladybird


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## kilamangiro (16 Jan 2014)

DMcL1971 said:


> Sounds to me like her parents, though well intentioned, have done a very stupid thing. If her parents had given their daughter a gift of 100K, then that is completely tax free. She can then chose to use this as a deposit on a house. The remaining money required to buy the house would come from a joint mortgage between you and her.
> 
> If her parents gave the money to both of you, then her 50K is tax free. The first 15,075 of your 50K is tax free. The remaining amount of 34,925 is taxable at a rate of 33%. Therefore they have cost you 11,641.66.



No, they gifted the money purely to her, not to me. 

She puts up the deposit of €100,000.

We get a joint mortgage for another €100,000 for arguments sake

We jointly own the house.

Has she therefore gifted something to me (or have her parents in effect gifted something to me because of gift-splitting) that may be taxable?


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## 44brendan (16 Jan 2014)

Sounds like a fairly straightforward transaction initially. Original gift is within CAT threshold. Use of funds to jointly purchase a property could be construed as agift to you of 50K. This could raise a CAT liability. Best to get advice from an accountant as per previous post in order to avoid any potential charge. Alternatively you could ring Revenue helpline as also suggested earlier.


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## DMcL1971 (16 Jan 2014)

As others have said I would check with the revenue commissioners to be on the safe side. You can ring them and they will advise you. You won't have to tell them who you are. I am not qualified in any way to advise you. I am only going by my own understanding of the information on the revenue website.

My understanding is that if she solely received 100K as a once off gift from her parents, then she has no tax liability and that is the end of it. The money is now hers, the same as any other savings she might have in her bank account. None of this has anything to do with you. From a tax point of view you have no relationship to her. 

If the two of you chose to buy a house together. You will pool your lifes savings together and require a mortgage to fund the shortfall. This mortgage will be jointly owed to the bank by both of you. At no point is she giving you any money, so there is no gift. All the money is going to a seller or estate agent to buy a house.

It is also worthwhile speaking to a mortgage broker on this. The deed for the house is a separate thing from the mortgage. If both your names appear on the deed then you jointly and equally own the house regardless of who supplied the lions share of the money. The mortgage is just a loan from the bank which you both have to pay back. The house is used as collateral by the bank in case either of you default on this loan.

It is also worthwhile considering what will happen if you split up in the future.

But as I said you need to double check anything that I or anyone else tells you with someone qualified.


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## T McGibney (16 Jan 2014)

DMcL1971 said:


> As others have said I would check with the revenue commissioners to be on the safe side. You can ring them and they will advise you.



Any advice given over the phone by Revenue staff  isn't worth the paper it is written on.


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## stephnyc (17 Jan 2014)

Would there be any point to signing an agreement that stated she own 75% of the house (the 100K deposit + 1/2 mortgage of 50K) and you own 25%, along with some agreements as to what should happen if you split up?

I would guess that upon marriage then the family law would take over. I know pre-nups are not enforceable as such, but would it be sufficient for revenue, if it was ever queried?


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## Bronte (17 Jan 2014)

In general, and even where one is married, if one partner pays the full deposit, they would be entitled to that percentage back on divorce etc.  The same applies in situations where only one partner pays the mortgage.  Many people assume that marriage gives one equal rights to the family home.


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## stoptheclock (4 Mar 2014)

How'd you get on with your gift ? Did you take advice ?


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