Under the current rules each child can receive gifts to the value of €280,000 from their parents in their lifetime without having to pay Capital Acquisitions Tax (Gift Tax).
The current rate of Gift Tax is 33%.
The recently formed government released their plans for their term in office across a broad range of issues last week. In it was an indication that they plan to raise the amount that a child can receive tax free in their lifetime from their parents from €280,000 to €500,000. It is expected that this change will come in to effect when the next Budget is announced in October 2016.
If you choose to delay the gift to your children until after this date your children could make significant tax savings. For example if you were to gift a house worth €340,000 to one of your children today they would end up with a tax bill of almost €20,000 under the current rules.
If, as expected, the rules change in October and you delay the gift until after this date then your child could take the gift of the same house tax free.
Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.