Monetary gift TO parent

[ophelia]

My parents would like to sell their present home and buy a smaller bungalow. The house they want is about E30,000 more than they can make on their old house. I want to make up the deficit for them. What, if any, are the tax implications for them? they are both retired and non-tax paying.

 

[CCOVICH]

There shouldn't be any tax implications for your parents in this situation. The relevant threshold for a child gifting top a parent is €47,815 (can be increased in certain circumstances).

 

[ARCH]

You may be able to get tax relief by using a covenant. Restricted to 5% of your income.

 

[justsally]

two Questions:

Ccovich if the parents are at present inside the taxable income limits , would any "gifted" money be taken into account for taxation purposes, ie. if their new income then exceeded their tax free allowance. Can the donor benefit from any tax relief?

Arch in order to gain tax relief on a Deed of Covenant can one make a once off annual payment or must one commit to paying by Deed of Covenant over a set number of years.

Thanks in advance.

 

[WizardDr]

On a Deed of covenant, it must be 'capable' of exceeding 7 years. Put a clause 'or until Mary Murphy of 7 The Larches, Dublin decides that it should be terminated'. Mary here would be a 3rd party.

 

[CCOVICH]

Ccovich if the parents are at present inside the taxable income limits , would any "gifted" money be taken into account for taxation purposes, ie. if their new income then exceeded their tax free allowance.

I think that you are confusing CAT and income tax-a gift isn't considered income, and so tax free allowances are not relevant.

Of course, any gift would be taken into account when a gift is received in the future, i.e. the CAT threshold is not an annual exemption. When determining eligiblity for 'relief', all previous gifts received from a disponer in the same class (A, B, or C) are aggregated.



If the transfer is made under Deed of Covenant, there may be income tax implications for the recipients.