Tax efficiency when paying for father's care

M

Mammysboy

Registered User
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I need to hire a carer to take care of my Dad; I am a PAYE employee so looking to offset the costs against the tax I pay; my Dad does not pay tax on his income

I have enduring power of attorney for my Dad and I would like to use his funds (that me and my siblings will inherit in due course)

How can I do this legally?

Many thanks for any guidance and please let me know if you need any more details to help answer this.
 
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If you pay for the carer from your own funds then you can claim tax relief.

Tax relief on employing a home carer

Tax relief is available on the cost of employing a carer for either yourself or for another family member.
www.citizensinformation.ie www.citizensinformation.ie
I believe that your father could reimburse you by gifting you the net amount subject to this (bar €3K p.a. under the small gift exemption scheme) reducing your lifetime group A Capital Acquisitions Tax/inheritance Tax exemption amount.

CAT groups and group thresholds

This page explains thresholds, rates and aggregation rules for calculating Capital Acquisitions Tax
www.revenue.ie www.revenue.ie

Small Gift Exemption

Exemption from CAT on small gifts
www.revenue.ie www.revenue.ie
If in doubt get professional advice.

E&OE
 
ClubMan said:
If you pay for the carer from your own funds then you can claim tax relief.

Tax relief on employing a home carer

Tax relief is available on the cost of employing a carer for either yourself or for another family member.
www.citizensinformation.ie www.citizensinformation.ie
I believe that your father could reimburse you by gifting you the net amount subject to this (bar €3K p.a. under the small gift exemption scheme) reducing your lifetime group A Capital Acquisitions Tax/inheritance Tax exemption amount.

CAT groups and group thresholds

This page explains thresholds, rates and aggregation rules for calculating Capital Acquisitions Tax
www.revenue.ie www.revenue.ie

Small Gift Exemption

Exemption from CAT on small gifts
www.revenue.ie www.revenue.ie
If in doubt get professional advice.

E&OE
Click to expand...
Yes thank you. Trying to get some advise here also.
 
ClubMan said:
If you pay for the carer from your own funds then you can claim tax relief.

Tax relief on employing a home carer

Tax relief is available on the cost of employing a carer for either yourself or for another family member.
www.citizensinformation.ie www.citizensinformation.ie
I believe that your father could reimburse you by gifting you the net amount subject to this (bar €3K p.a. under the small gift exemption scheme) reducing your lifetime group A Capital Acquisitions Tax/inheritance Tax exemption amount.

CAT groups and group thresholds

This page explains thresholds, rates and aggregation rules for calculating Capital Acquisitions Tax
www.revenue.ie www.revenue.ie

Small Gift Exemption

Exemption from CAT on small gifts
www.revenue.ie www.revenue.ie
If in doubt get professional advice.

E&OE
Click to expand...
Sorry, I see @T McGibney's comment on this strategy here so maybe scratch that?

Using gift money to employ carer for Dad

Hi, My father, age 77, lives at home in his own house, unfortunately he had a stroke recently. He wants to remain at home and employ a private career 5 days per week, he will use his savings to pay for this. The private career will cost roughly €25,000 per annum Gross. I know from revenue.ie...
www.askaboutmoney.com
 
Maybe it would help if I add some specifics:

  • My father, 90, dementia living at home alone, I am going to employ a live-in carer next year at about 36,000/annum
  • I have 2 siblings - both live outside of Ireland so are not paying tax here
  • I am PAYE employee on higher rate of tax
  • My Dad's assets are approximately as follows:
  • House Value of 600,000
  • Cash/Savings of 350,000
  • His income is about 19,000 per year
  • My Dad's will will distribute the estate equally between the 3 of us
Thank you!
 
Mammysboy said:
Can you help me understand why not please? In this other thread here you mentioned "A less obvious but similar strategy might be advised depending on your own and your father's situation."

Thanks
Click to expand...
The proposal in that case is substantially different to what you have outlined above.

Why aren't you discussing this with your accountant?
 
T McGibney said:
The proposal in that case is substantially different to what you have outlined above.

Why aren't you discussing this with your accountant?
Click to expand...
I am looking for options, the proposal outlined is an option I would like to consider and I have come here to understand if there are other options. I have sent a query to my accountant also and await their feedback.
 
Mammysboy said:
I am looking for options, the proposal outlined is an option I would like to consider and I have come here to understand if there are other options. I have sent a query to my accountant also and await their feedback.
Click to expand...
What proposal?
 
You'll have to ask that of whoever advised you on enduring power of attorney and how it works. I am not a lawyer.
Click to expand...

I'm hoping someone on this website will have experience of the different domains involved whether they be legal or tax related. I'd doubt my family's circumstances are very unique so I'll remain hopeful.
 
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