CAT - Small gift exemption

[DaveD]

My 80 year old mother is "getting her affairs in order"!

She has just inherited some money and now has about €76k in her current account. While she's in good heath she is sensible enough to realise at her age this could change and she may need to go into a nursing home in future years and avail of the Fair Deal Scheme. Her only assets are her home (€200k) that she owns and the €75k in the bank. She understands that the Fair Deal Scheme would "claim" any savings over €36k before the 7.5% per year for 3 years loan against her house and would like to gift it to people while she's healthy.

Using the annual €3k CAT small gift exemption can she just give €3k to 5 different people (children, grandchildren) this year, and the same for the next 2 years so that her cash assets are below €36k? Should these be bank transfers named as "Gift to X" or does any of that matter?

Or is there an easier more efficient way of her bringing her cash assets below €36k? Other than spending it on herself, which she can't be persuaded to do.

My understanding is that the €3k CAT exemption for small gifts is €3k per annum from any single person and that it's not cumulative across several gifters. So a person could receive €9k from 3 different people in a year. Correct?

 

[T McGibney]

Firstly, it's a CAT exemption, nothing to do with CGT.

Also, unless her children's Group A CAT thresholds are already fully exhausted or likely to become so in the future, it would probably be simpler and easier for everyone if she merely divides out the money among you and your siblings?

 

[ClubMan]

This thread may also be relevant in this case?

Is disposing of assets to avail of the Fair Deal Scheme fair?

Moved from this thread https://www.askaboutmoney.com/threads/avoiding-the-fair-deal-scheme.237092/ Thanks again for replies, all very helpful. As per initial post, the house is currently worth 300k, so nothing underhand being proposed. Dad is 82 and is finding it difficult to spend his...

www.askaboutmoney.com

 

[DaveD]

Firstly, it's a CAT exemption, nothing to do with CGT.

Also, unless her children's are already fully exhausted or likely to become so in the future, it would probably be simpler and easier for everyone if she merely divides out the money among you and your siblings?

Thanks, CGT amended to CAT in original post.

Group A CAT thresholds very unlikely to be exhausted so I'll suggest that.

This thread may also be relevant in this case?

Is disposing of assets to avail of the Fair Deal Scheme fair?

Moved from this thread https://www.askaboutmoney.com/threads/avoiding-the-fair-deal-scheme.237092/ Thanks again for replies, all very helpful. As per initial post, the house is currently worth 300k, so nothing underhand being proposed. Dad is 82 and is finding it difficult to spend his...

www.askaboutmoney.com

Interesting reading.

 

[ClubMan]

Interesting reading.

I should have clarified that I was posting it mainly to highlight this point in case your mother was considering transferring assets purely or mainly to game the Fair Deal Scheme:

Financial assessment: How much you pay towards care

Find out how how the Fair Deal financial assessment works and how we calculate your payments towards nursing home care.

www2.hse.ie

Transferred Assets
The financial assessment includes any assets you have transferred:

• in the 5 years before the date of your first application
• on or after the date of your first application

If you have given any land, property or money to another person in the last 5 years, you will need to tell us. You will also need to tell us if you transfer any property, money or land after you make an application.