Tax on Bare Trust for Minor Investment

[Byzantium]

I appreciate that 3k is tax free per year, if I invest say 5k into this account per year and at 18 years it has increased in value. How is tax calculated at maturation then if you give more than the tax free amount? Sorry if my wording is clunky. Looking at Davy Minor - (have a davy select account for PRSA). Thanks.

 

[Fibbernacci]

I think you will owe 33% gift tax above 3k on the way in and then the usual 41% exit tax on the way out

 

[ClubMan]

and then the usual 41% exit tax on the way out

On the growth only presumably, not the full value?
And subject to whatever happened previously with 8 yearly deemed disposal taxation as long as that remains in force?

 

[torblednam]

Well unless you have made other gifts that ate up the lifetime parent-to-child threshold, you're simply using up 2k of their threshold each year, so 36k up to year 18.

 

[_OkGo_]

I think you will owe 33% gift tax above 3k on the way in and then the usual 41% exit tax on the way out

No they do not owe CAT on the way in.

€3k is is covered by the small gift exemption. The other €2k just reduces the lifetime group A threshold.

After that, the gain is taxed as usual

 

[dublin67]

Trusts aren't something you can dabble in. Don't forget the potential application of section 795 TCA - can be a missed piece of anti-avoidance legislation.

 

[Villaines]

Is there a way the stamp duty can be avoided on these funds investments in bare trusts. I read somewhere that if the investments of €250 are made monthly, the 1% duty can be avoided, as the taxable amount is below the de minimus. Anyone who can confirm this?