Will annual gift of €3000 to beneficiary be exempt from inheritance tax.

[lowspender]

If I gift my niece €3000 a year each December will it cause a tax problem with her inheriting house taxwise.
Hopefully I will live a few more years and it would reduce her tax liability by me having less savings to leave to her.
My fear is taxman will include earlier gifts in inheritance.

 

[Pmc365]

€3,000 small gift exemption per annum is disregarded when aggregating prior benefits received since the 5th December 1991 for the purposes of Group B tax free CAT threshold amount.

 

[lowspender]

€3,000 small gift exemption per annum is disregarded when aggregating prior benefits received since the 5th December 1991 for the purposes of Group B tax free CAT threshold amount.

Thanks, so that means I can gift her €3000 a year and she will only pay tax on remainder after my death.

 

[Gordon Gekko]

Thanks, so that means I can gift her €3000 a year and she will only pay tax on remainder after my death.

Yes, the first €3k per year from anyone is disregarded

 

[homer911]

But not in year of death, that's treated as part of any inheritance

 

[Gordon Gekko]

But not in year of death, that's treated as part of any inheritance

Sorry, but I don’t believe that this is correct.

If I gift €3k to my son today and then I’m hit by a bus tomorrow, the gift does not become an inheritance.

 

[MOB]

Sorry, but I don’t believe that this is correct.

If I gift €3k to my son today and then I’m hit by a bus tomorrow, the gift does not become an inheritance.

Unleashing my inner nerd for a moment: - Strictly speaking, it actually does.

A gift is defined as any benefit which is not taken "on a death".

"On a death" includes any benefit taken "within 2 years prior to the death of the disponer"

However, an exempt gift which becomes an inheritance is still exempt, as there is a specific saving provision to exempt the inheritance.

 

[Pmc365]

So a gift of €3,000 is exempt from CAT even if the person gifting (?disponer) dies within two years of making the gift?

 

[Gordon Gekko]

No it doesn’t. Section 69(3) means the €3k doesn’t become taxable. That’s the point. The rest is just unnecessarily pedantic. I was trying to explain it and correct the mistake in layperson’s terms.

 

[Gordon Gekko]

So a gift of €3,000 is exempt from CAT even if the person gifting (?disponer) dies within two years of making the gift?

Yes

 

[Pmc365]

I think this idea of a gift becoming an inheritance if disponer dies within 2 years is a throwback to a time when gift tax if I remember correctly was less than inheritance tax.