Receiving gift from relative who lives in Australia

[Gracemark]

Hi
My sister who is an Australian resident for approx 40 wants to gift me and each of my children approx 50k (euro) each.This would be the sale proceeds of a property she owns outright in her own name here in Ireland.
Can you please tell me if my we have to pay gift tax on this money as she will be transferring it from her Australian bank account
Many Thanks

 

[Protocol]

Information on CAT here:

Gift and Inheritance Tax (Capital Acquisitions Tax – CAT)

This page gives a general overview on CAT implications on gifts and inheritence.

www.revenue.ie

 

[Protocol]

The source of the gift (i.e. Australia / bank account) is not relevant.

The amount of the gift received is relevant.

The relationship between the donor and the beneficiary is relevant.

Please study the group thresholds.

 

[Gracemark]

Thanks for that ...just wasn't sure as the money is coming from Australia

 

[jpd]

In brief, anything a nephew or niece receives from an uncle, aunt, grandparent is in category B
The cumulative lifetime tax-free threshold is € 40,000 - anything over that is taxed at 33%

 

[misemoi]

Don't forget the small gift exemption per calendar year. So if your aunt gives you each all EUR 3k in 2024 and EUR 3k in 2025, then the remainder of the EUR 44k is the relevant gift for CAT. If they have a spouse who would be part owner of the initial cash proceeds, the spouse can do the same, leaving only EUR 41k for CAT. So if you all have intact thresholds, then tax would only be 33% of 1k.

 

[Dr Strangelove]

Thanks for that ...just wasn't sure as the money is coming from Australia

It could be going from her account in Kenya to your account in Japan.

The tax treatment doesn’t depend on where the funds are held.

 

[Gracemark]

Many thanks ...just needed clarification

 

[charlie007]

There may be tax implications for your sister in Australia as well?
If so, professional help in how to structure the various transactions could be well advised.

 

[ClubMan]

There may be tax implications for your sister in Australia as well?

Why might there be any tax implications for a gift donor?

 

[charlie007]

Why might there be any tax implications for a gift donor?

Does Australia not have some kind of CGT which the sister might be liable for?

 

[ClubMan]

Does Australia not have some kind of CGT which the sister might be liable for?

Ah, ok. I thought that the gift was from cash/savings but see now what it's from the proceeds of the sale of a property so CGT or the Australian equivalent may well be an issue alright...

 

[charlie007]

Ah, ok. I thought that the gift was from cash/savings but see now what it's from the proceeds of the sale of a property so CGT or the Australian equivalent may well be an issue alright...

Also OP states it 'would be the sales proceeds of a property' suggesting maybe the property isn't sold yet?

 

[TomEdison]

The OP states that the property the sister will sell is in Ireland.

So she's liable to Irish Capital Gains Tax.

She's also liable to be taxed in Australia on the gain, but she'll get a full credit against her Australian tax liabity for any CGT paid in Ireland.

Presumably, her calculation of what she can distribute to the OP and her childrent takes account of her Irish and Australian tax obligations. If not, the OP might like to point this out and invite her to recalculate the amount she can distribute. She won't want to distribute the sale proceeds and then be hit with large tax bills that she doesn't have the money to pay.