Gift tax for gifts to children

[Benny]

I had a windfall and i want to give substantial gift to a child of friends of mine , it would be in their accounts until they are 21 or whatever.

Do i need to pay gift tax on it ? or would splitting it over two years avoid
the tax.

Say 2,500 in year 1 and in year 2.

 

[ClubMan]

Do i need to pay gift tax on it ?

On the windfall itself? That depends on how it arose. On the gift? Not if it is below the relevant exemption limit (in this case €23,908 in total over the recipient's lifetime) and if it's above that then the tax liability is the recipient's and not your's.

 

[BobMax]

You can "Gift" €3,000 each year Tax Free>
BobMax

 

[ClubMan]

Are you sure about that? According to :

Exceptions

There are a number of items that are not assessable for Capital Acquisitions Tax. The most important are:

• the first 3,000 euro of gifts from one donor (this does not apply to inheritances)
• ...

This does not suggest that it's €3K p.a. from a single donor.

 

[BobMax]

It is "GIFT" I am referring to...€3.000 per year free of Tax
BobMax

 

[ClubMan]

Can you or anybody else quote/link to the relevant Revenue summary document or TCA section that governs this please?

Update: oh - perhaps [broken link removed] is it so?

For example, the first €3,000 taken as a gift by a beneficiary from a disponer in any one year is exempt from tax as are gifts and inheritances taken by one spouse from the other.

 

[BobMax]

in John Lowe's "The Money Doctor" page 260
EXCLUDED COMPLETELY FOR THE PURPOSE OF CAPITAL ACQUISITIONTAX:
"Up to €3,000 worth of gifts or cash in any single calender year"
My Accountant confirmed to me that I can "Gift" each of my children and my Grandchild €3,000 each year tax free.
BobMax

 

[Ned_ie]

S69 Capital Acquisitions Tax Consolidation Act 2003

69.—(1) In this section, "relevant period" means the period of 12 months ending on 31 December in each year.
(2) The first €3,000 of the total taxable value of all taxable gifts taken by a donee from any one disponer in any relevant period is exempt from tax and is not taken into account in computing tax.
(3) In the case of a gift which becomes an inheritance by reason of its being taken under a disposition where the date of the disposition is within 2 years prior to the death of the disponer, the same relief is granted in respect of that inheritance under subsection (2) as if it were a gift.