Gift in Quick Succession

C

Coolemon

Guest
My father inherited a large enough sum of money recently, and has decided to gift it between his sons and daughters. When divided, the amounts do not exceed the allowed threshold before it is taxed.

However, for various reasons, I want to gift this money to my daughter as soon as my own bank clears the initial check.

This way, no tax should be paid by me or my daughter, since both transactions are between father and son, and father and daughter, and the amount does not reach the tax threshold.

I have gone to Citizens Information about this and they said it should be ok.

However, I have phoned the Revenue today and they say the money must be in my bank account for 3 years before I can gift it forward otherwise it will be taxed. No-where can I find such a rule on the internet, and it seems completely unfair. Me passing the money on now is the same as if I were to do it in three years time. It would still add to my and my daughters maximum allowed gift/inheritance over their lifetime without tax.

I dont know whether the revenue chap is spoofing or what. Can anyone tell me anything about this? Or any way to transfer the money without being taxed?
 
A rule will be applied that it is a gift between your father and your daughter. Gift tax may or may not then be payable.

For the sake of an accountants fee for a consultation and form completion it may be worth ringing around a few looking for an appointment.
 
A gift tax would be payable as it is over 33,000. I cant understand that though. It would no longer be a gift from grandfather to daughter when it is given to me first. I cant see anywhere whwre it says 3 years either!
 
CAPITAL ACQUISITIONS TAX CONSOLIDATION ACT 2003
Part 2 Section 8

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 3 years before and ending 3 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 is deemed to take a gift
from the original disponer (and not from the immediate disponer
under whose disposition the gift was taken);

No, the Revenue chap is not spoofing. By law you would have to wait 3 years before the gift from you to your daughter would not be seen as a gift to her from her grandfather.
 
Hmmm... so by taking a gift of 20,000 say.. that prevents you from furthering gifts onto other people, even if you have 1,000,000?
So in that case, if you gave 40K away to someone else (within 3 years of taking the 20K), .. the first 20K would be considered a re-gift from the original donor, and the second 20K would be a normal gift. Does this apply even if the second 'gift-ee' doesn't know the first 'gift-er'.. seems strange.

So it seems that accepting a gift can hinder your ability to give gifts yourself for the three years after... something worth knowing for people who gift a lot.
 
JoeBallantin said:
Hmmm... so by taking a gift of 20,000 say.. that prevents you from furthering gifts onto other people, even if you have 1,000,000?
.
Click to expand...
I think it would make sense that if you can show you have the means in any case to make the second gift, that would not be considered a gift from the original disponer. If you had 50k in your accounts and then gifted 100k , I think that would raise the Revenue's eyebrows. Slim
 
The paragraph linked to be Gervan doesn't make anything at all clear. There's no mention of size of gifts, ability to pay second and third gifts without having received the first gift, and the issue of second gifts that are larger than the first gift, and second gifts that are totally unrelated to previous gifts, yet the 'gift chain' must apply.
Perhaps there's more on it in the rest of the document.. Revenue usually think things through. But to specify everything completely takes so long and becomes so complicated that they may not have bothered.
 
Should bear in mind that the law is constructed so that all gifts are taxed with the exception of certain conditional gifts between connected individuals. The OP is seeking to avail of an exception and, as with all exceptions, the onus is on the OP to prove that they are entitled to the exception - otherwise default rules apply.

CAPITAL ACQUISITIONS TAX CONSOLIDATION ACT 2003
Part 2 Section 8

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 3 years before and ending 3 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 is deemed to take a gift
from the original disponer (and not from the immediate disponer
under whose disposition the gift was taken);
Click to expand...

Should also note that the phrase 'a gift' as opposed to 'the gift' is used, so I assume this means that if someone receives a gift, they cannot make any gift to any other person within the 3 year period regardless of whether or not the money/assets they were planning to gift is not the same money/assets they received.
 
This scenario is on the Revenue Website. They call it "Gift Splitting", under "General CAT issues", I find that section of the CAT page includes some of the more obscure issues.

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

Any gift seems to be within the net here. Also, remember according to legislation quoted above, even if you gift something today, and TAKE a gift within 3 years of that first gift, the Section 8 rules apply. It's an anti avoidance measure I suppose, otherwise all gifts from say grandparents to grandchildren could be exempt or not liable if the value is below the child threshold, and the gift is channelled through the child first.
 
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