Capital Acquisitions Tax

Gjp650

Hi,

I have received 2 gift cheques, both of which are above the related thresholds for gift and CAT.

Each of the cheques is marked with '& Co' meaning that I can sign the back of one of them and have the money lodged to another persons bank account.

If I do this, does that mean that each of us now are liable to CAT and can use the appropriate thresholds since 2 people actually received the funds?

Or since both cheques were originally made out in my name, am I liable for the full CAT amount.

Thanks

Calahonda52

You are liable for the whole lot, anything else is fraud.
You need to file the return on ROS, its self assessment

Peregrinus

Gjp650 wrote: »

Hi,

I have received 2 gift cheques, both of which are above the related thresholds for gift and CAT.

Each of the cheques is marked with '& Co' meaning that I can sign the back of one of them and have the money lodged to another persons bank account.

If I do this, does that mean that each of us now are liable to CAT and can use the appropriate thresholds since 2 people actually received the funds?

Or since both cheques were originally made out in my name, am I liable for the full CAT amount.

Thanks

No. If you receive a gift of, say, 50k, you are liable to CAT on that gift. You can of course avail of the appropriate threshold.

If you then give 25k of it to another person, that's a second gift, from you to him, of 25k. He can avail of the appropriate threshold in respect of that gift, but he gets no credit for the tax you pay on the gift you receive.

Gjp650

so I am liable for the full CAT even if one of the cheques doesn't touch my bank account at all?
its the fact that both cheques were originally made out to me means that I am liable for the full CAT.

barneystinson

Gjp650 wrote: »

so I am liable for the full CAT even if one of the cheques doesn't touch my bank account at all?
its the fact that both cheques were originally made out to me means that I am liable for the full CAT.

It's the fact that the money's been given to you.
You're talking about deciding to do X, Y or Z with it after the fact.

Peregrinus

Gjp650 wrote: »

so I am liable for the full CAT even if one of the cheques doesn't touch my bank account at all?
its the fact that both cheques were originally made out to me means that I am liable for the full CAT.

Yes. You're entitled to the money. It makes no difference whether you ever lodge the money to your own account. You could, in theory, go to the bank on which the cheque is drawn, present the cheque and walk away with cash.

The fact the money is yours is shown by the fact that you have the right to give it to somebody else (by endorsing the cheque to them).

Calahonda52

Gjp650 wrote: »

so I am liable for the full CAT even if one of the cheques doesn't touch my bank account at all?
its the fact that both cheques were originally made out to me means that I am liable for the full CAT.

In addition remember that Revenue will see the disposal on the other side.

Gjp650

so there are no loopholes in order to reduce the CAT?

Calahonda52

Gjp650 wrote: »

so there are no loopholes in order to reduce the CAT?

Refuse the gifts, simples:D

ThumbTaxed

Don't get gifts

ThumbTaxed

ThumbTaxed wrote: »

Don't

barneystinson

Calahonda52 wrote: »

In addition remember that Revenue will see the disposal on the other side.

Really? How so?

Peregrinus

Gjp650 wrote: »

so there are no loopholes in order to reduce the CAT?

Not after the gifts have been made, no. If you and the donor had discussed this beforehand, you could have suggested, hey, instead of giving me 2x euros, why don't you give me x euros and my spouse x euros? (Or whatever division would have been most tax-efficient).

wiggle16

Loopholes?

You received a gift. You are liable for the tax due on that gift in its entirety regardless of what you want to do with it. Anything else is fraud, as pointed out previously.

Why don't you just pay the tax you owe, like everyone else?

scheister

could passing the cheque to the second person be seen as gift splitting and therefore the OP is removed from that part of the equation.

Peregrinus

Possibly, but I don't think this will help. The gift-splitting provisions affect the calculation of CAT in respect of the second gift (it's deemed to be taken from the original disonor, and the appropriate threshold applies) but they don't affect the calculation of CAT in respect of the first gift.


So, A gives 2x to B; this is taxed as a gift of 2X from A to B. B then gives x to C; the application of the gift-splitting rules mean that this is taxed as a gift of x from A to C rather than a gift of x from B to C. But the tax liability on the original gift from A to B is unaffected.