My daughter is living and working in London since January 2025. She intends to stay there for another year or so, and probably then come back to Ireland.<\/p>\n
Reading your column last week, I\u2019m wondering if I could\/should use her sojourn to gift her some of her inheritance with no tax implications?<\/p>\n
PM<\/p>\n
The vagaries of the respective tax systems mean that, in Ireland, tax is assessed against the beneficiary while, in the UK, it is weighed against the person making the gift or their estate after they die.<\/p>\n
As we said last week, there is nothing to stop someone based in Ireland gifting cash to a person who is based in the UK. In fact, there does not seem to be anything limiting the gifting to just \u20ac3,000 or less in any year as per the small gift exemption rules.<\/p>\n
But the key here is that the recipient of the benefit is living abroad. If they come home as your daughter is planning on doing, the rules change again.<\/p>\n
Once she is back in Ireland, anything she receives by way of inheritance or gift is constrained. She can, of course, avail of the small gift exemption, but anything over that will be offset against her lifetime limit.<\/p>\n
That includes anything she may have received while she was away, as the rules tot up everything received by a person over the last quarter century \u2013 since December 5th, 2001, to be precise.<\/p>\n
So if you were to gift her \u20ac5,000 this year while she was in the UK, there would be no immediate tax issue. However, on her return, the \u20ac2,000 above the small gift exemption limit would be offset against the \u20ac400,000 she can receive from a parent free of tax over her lifetime.<\/p>\n
The fact that she received it while she was abroad won\u2019t help her.<\/p>\n
Gifting from the UK<\/p>\n
You were writing recently about a parent gifting money to a child in the UK under the small gift exemption. My dad is in the UK. He would hate to pay 40 per cent of his hard-earned estate to the tax man and is considering leaving it in trust to be rented in some way (if that is even possible).<\/p>\n
I moved to Ireland 10 years ago. Would any cash gift amount be subject to any tax, or could you make any gifts with no tax liability as you have stated is the case from Ireland to the UK?<\/p>\n
JC<\/p>\n
I\u2019m not going to get into UK trust law here, but keep the focus on your main point about gifting from the UK to Ireland.<\/p>\n
While an Irish parent can gift to an Irish child living in the UK with neither side having to worry about capital taxes, it does not work in reverse.<\/p>\n
In fact, as far as I can see, you will be caught both ways. As you are here 10 years, you are tax resident here and so will be subject to Irish rules about capital acquisitions tax on any gifts (over \u20ac3,000 a year) that you receive from the UK \u2013 or anywhere else.<\/p>\n
You can inherit up to \u20ac400,000 from your parents over your lifetime tax free but that threshold is reduced by anything over \u20ac3,000 that you get in any year as a gift.<\/p>\n
And, depending on when your father dies, he won\u2019t escape either. Gifts he makes are set against his estate to at least some extent if he dies within seven years of those gifts being made.<\/p>\n