If you ever want to gift money or assets to your children, then you have to consider gift tax. Gift tax in Ireland is 33%.
Here are a few useful tips on how to avoid having to pay gift tax in Ireland:
- You can gift a child a lifetime limit of €400,000 before they are liable to pay any gift tax.
- In addition to the above, you can also gift a child a further €3,000 each year which will not be subject to gift tax.
- If there are 2 parents who wish to gift to a child then, the child can receive up to €3,000 per year from each parent without having to pay any gift tax, which is €6,000 per year.
- If you have a daughter and a son in law and 2 grandchildren, then you and your spouse can gift €3,000 to each of these people per year. That means each parent could gift (4 x €3,000) €12,000, which is a total of €24,000 per year from the two parents to their daughter and her family without paying any gift tax.
- If your gifts are likely to exceed these limits in the future, you can set up a savings policy now, called a Section 73 savings policy which you must keep in place for a minimum of 8 years and the proceeds of this savings policy can be used to pay the future 33% gift tax.
So there are ways to avoid paying gift tax, as long as you plan it properly!
Feel free to call us on 01 5267770 or 053 9110380 if you have any questions.
