# Gifting money to my sister to buy house



## 1dave123 (8 May 2008)

Hello 

I am considering giving my sister a loan to help her buy a house. Before I take the matter to a professional adviser I was hoping to sense check my understanding. 

If anyone has any thoughts please do let me know

My understanding 

1. If I gift her more than €52k, she will be immediately liable to 20% gift tax on the excess (she has received no previous gifts from me)

2. If I give her an interest free loan, the Revenue will ‘deem’ interest to be payable to me at current commercial rates and I will be taxed on this notional interest at my marginal rate.

Does anyone know if the ‘current commercial loan rate’ used by the Revenue is (1) personal loan rates or (2) mortgage % rates?

3 If I gifted money to my sister up to the gift tax threshold and then gifted a similar amount to my mother ….. who then gifted that amount to my sister, would that be a legitimate means of avoiding the gift tax …… or would that be deemed tax evasion and therefore a no-no? …… I suspect the latter as it seems a little too easy

4 I am aware that there is an annual gift tax exemption of €3k. Is that in addition to the €52k threshold?

Many thanks indeed


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## Iceman732 (9 May 2008)

5% for someone PPR and 12% otherwise


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## Satanta (9 May 2008)

1dave123 said:


> 3 If I gifted money to my sister up to the gift tax threshold and then gifted a similar amount to my mother ….. who then gifted that amount to my sister, would that be a legitimate means of avoiding the gift tax …… or would that be deemed tax evasion and therefore a no-no? …… I suspect the latter as it seems a little too easy


Definatly the latter. The gift will be deemed as going from you directly to your sister (and taxed accordingly) as the gift between you/mother/sister is seen as a means of tax evasion. 

There are good (relatively speaking) guidlines on www.revenue.ie if you search for "Gift tax" or "CAT". In a situation involving large sums etc., definatly best to get professional advice.

The exemption each year is in addition to the threshold (or seperate from, depending on how you look at it). 

Worth noting that your sister must inform Revenue when she reaches 80% of her threshold, even if she doesn't/will not go over it.


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## 1dave123 (10 May 2008)

Satanta/Iceman732

Many thanks for the feedback.


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## GeneralZod (10 May 2008)

1dave123 said:


> 4 I am aware that there is an annual gift tax exemption of €3k. Is that in addition to the €52k threshold?



What's the answer to this question?


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## Blinder (10 May 2008)

GeneralZod said:


> What's the answer to this question?





Satanta said:


> The exemption each year is in addition to the threshold (or seperate from, depending on how you look at it).


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## GeneralZod (10 May 2008)

Oh right thanks


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## eamonn22 (10 May 2008)

hiya

you're right in that 20% CAT will be payable on anything over €52,108 (in 2008) to your sister - on the assumption that she hasn't received any gift or inheritance from anyone else within her group (b) threshold (ie brother,sister,uncle,aunt...) since 1991.  you are also correct in that on top of the €52,108 you can gift her €3,000 every year using the small gifts exemption.  this is a very useful tool.  maybe you could look into giving her the €52,108 now and give her 3k every year from now on.  if you give her an interest free loan then there will be gift tax on the interest free element of the loan (it is classed the same as "free use of property" under the CAT act).  if you give it to your mother, to give to your sister, then revenue will look through it and deem that it came from you.

hope that helps


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