5k gift for mortgage deposit from dad

snowflake1989

Hi all my dad is giving me 5k towards my deposit for a house, can someone tell me is this taxable?
I seen something about 3k being the max one parent could give?
Could i say my mam gave me 2k and my dad gave me 3k to avoid being taxed
Thanks for your help again

FishOnABike

I'd have to check but I think that's an annual limit and there's a lifetime limit too. Being gifted some of the deposit in December and the rest in January, thus splitting the 5k over two tax years would be a way of avoiding going over the annual limit.

hanaimai

The limit is like 310000 in a lifetime for a parent to give a child tax free, so you're fine.

The first 3000 received from a parent every year doesn't count towards the 310000 limit i.e. if your parents have never gifted you money before and they gift you 5000 in 2018, then you pay zero tax on any of that and your lifetime limit is reduced by 2000 to 308000.

FishOnABike

Each parent could also gift you up to 3k per year without it being liable to capital acquisitions tax. See https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/small-gift-exemption/index.aspx

The following
https://trustedadvisorgroup.ie/understanding-gift-and-inheritance-tax/
would seem to indicate this can be done without affecting lifetime thresholds.

Sleeper12

The most tax efficient way is for your mam and dad give you 2500 each. This is below the 3000 annual limit you can get from your parents. Doing it this way means that you aren't using any of your lifetime inheritance tax free allowance

BorneTobyWilde

Who the hell is going to know is my question, funny how some people want to run to the government that is ripping them off left right and center with a few euro tax more, here have a little more.

BorneTobyWilde

The reason you don't have the money for the deposit in the first place is fact you're paying through the nose for everything.

Tell me how

BorneTobyWilde wrote: »

Who the hell is going to know is my question, funny how some people want to run to the government that is ripping them off left right and center with a few euro tax more, here have a little more.

That's all well and good until mortgage approval is withheld because of an anomaly in declarations. Unless you can pay for an accountant to hide things for you or to guide you very carefully, you are as well off to try to play everything by the book. It's just too easy for them to throw a spanner in the works and force you to start again.

Even if you just land €5k in deposit in to your account, the bank will want to know where that came from.

Allllll that being said, in 2006 my auld fella gave me 20K for 6 months until my SSIA matured which facilitated me paying my deposit. All I had to do was present a letter to the bank that it was a gift that I wouldn't have to repay. My SSIA played no part in mortgage approval so all that worked out fine.

But, I understand the rules are somewhat different these days.

Sleeper12

BorneTobyWilde wrote:

Who the hell is going to know is my question, funny how some people want to run to the government that is ripping them off left right and center with a few euro tax more, here have a little more.

Most people want to do things legally. Op wants to avoid paying gift tax & there is a way to do it perfectly legally. What is wrong with that? If op is buying a house & using the money the taxman might want to know where it came from. Particularly if they are self employed. If op has another 5k to add to it & lodges it in the bank, the bank notify revenue. Anything over 10k & alarms start ringing.

Bubbaclaus

BorneTobyWilde wrote: »

Who the hell is going to know is my question, funny how some people want to run to the government that is ripping them off left right and center with a few euro tax more, here have a little more.

Clown

Sleeper12

Sleeper12 wrote: »

Most people want to do things legally. Op wants to avoid paying gift tax & there is a way to do it perfectly legally. What is wrong with that? If op is buying a house & using the money the taxman might want to know where it came from. Particularly if they are self employed. If op has another 5k to add to it & lodges it in the bank, the bank notify revenue. Anything over 10k & alarms start ringing.

In this instance there is no reporting required regardless. The most tax efficient way of doing it is to split it 2.5k from each parent but even if the op got 5k from his father only it would use 2k of his life time exemption of 310000 but that’s it. He needs to keep this in mind himself but he has no obligation to report the usage of such a small percentage of his exemption to revenue.

As for 10k setting off alarm bells, that’s a myth. If it was cash it might raise some eyebrows but a check or bank transfer won’t be setting off any alarm bells. Even cash sums like that often get lodged after a wedding etc and you don’t hear couples getting questioned on it.

Sleeper12

Kaison Fit Stocking wrote: »

In this instance there is no reporting required regardless. The most tax efficient way of doing it is to split it 2.5k from each parent but even if the op got 5k from his father only it would use 2k of his life time exemption of 310000 but that’s it. He needs to keep this in mind himself but he has no obligation to report the usage of such a small percentage of his exemption to revenue.

As for 10k setting off alarm bells, that’s a myth. If it was cash it might raise some eyebrows but a check or bank transfer won’t be setting off any alarm bells. Even cash sums like that often get lodged after a wedding etc and you don’t hear couples getting questioned on it.

Are you sure about this?


I'm not saying you are wrong because I don't know. All I can add is that I have a checklist from my accountant every year & one of the questions asked is about anything over 3K. I know that the question is relevant to taxes owed in that tax year. I always assumed my answer was forwarded to revenue & someone was keeping tabs throughout the year