Annual Gift Tax Exemption
Annual Gift Tax Exemption
Every person can receive up to €3,000 per annum by way of gift from any one donor. This means in the case of children they could receive €6,000 per annum from their parents. Each parent can make an annual gift of €3,000 from their own resources to a child which would be completely ignored for gift tax purposes.
Example 1- Use Of Annual Gift Tax Free Allowance
Married couple
With 3 children who are married and who each have 3 of their own children.
3 children
3 in-laws
9 grandchildren
15 x €6,000 per annum= €90,000 Future Tax Saving @ 33% is €29,700.
In this example there is a very substantial future tax saving if the parents can take maximum advantage of the annual gift allowance.
Example 2 – Using all available Tax Free Exemptions
Assume Following Facts:
- Parents have assets of €2m which they want to give to their children
- They have 2 children, each married with 3 kids of their own
Questions: How can they distribute the money to minimise tax?
By spreading the benefit over all the family members a large amount of capital acquisitions tax can be saved.
If you need further details or would like to arrange for a consultation to discuss the above please see here.
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