Money gifts to children

Hi,
We have 2 teenage children and we would like to put some money into their accounts for them for the future. Can you tell me is there a limit we can give and if there will be any tax implications later for our children or ourselves.

In the current year, a parent may gift up to €521,208 to a son / daughter without incurring or causing a tax liability, AFAIK. (See Indexed Thresholds for Capital Acquisitions Tax - 2008 - Gift and Inheritance Tax on the Revenue site for more information)

The effect of gifts is cumulative so when your children come to inherit your estate (if those are your wishes) any earlier gifts need to be added to each of their individual inheritances in order to calculate the beneficiaries tax liability at the time of inheritance. The allowable tax-free ceiling is generally increased year on year by the Revenue, as is the current value of past gifts.

I hope that makes sense.

Hi,
All that makes perfect sense, thanks for that.

I think you can gift €3k per annum totally tax free that won't be set against the €500k-odd tax limit. This is assuming that they don't get gifts from others (the €3k per annum is the max tax free from all donors during the year)

Someone else can confirm perhaps.

Sprite

I think you can gift €3k per annum totally tax free that won't be set against the €500k-odd tax limit. This is assuming that they don't get gifts from others (the €3k per annum is the max tax free from all donors during the year)

Someone else can confirm perhaps.

Sprite

Click to expand...

Correct, and you don't even have to inform revenue of this!

Is it not incorrect - ie that the exemption of €3K pa applies to all donors and is not a total. For example if you had ten rich friends and they gave €3K each to you you'd have €30K tax free? In this instance if the Op and her husband each gifted their children €3K each on 31/12/08 and €3K each on 1/1/09 their children would have €12K each tax free wiithout affecting their overall limit of €521,208.
Maybe someone could either confirm this or set me straight on it

Various exemptions from gift and Inheritance Tax have been provided for. For example, the first €3,000 taken as a gift by a beneficiary from a disponer in any one year is exempt from tax

Above is from Revenue.ie [broken link removed]

The small gift exemption allows a person €3,000 tax free per donor per year. Therefore your children can get €3,000 from you and €3,000 from your husband per year which will not be taken into account when later accumulating their taxable gifts above the tax threshold.