Gift for deposit

hawkelady

Absolutely mad to tell them something that you’ll have to pay inheritance tax on a measly €7k !!
I thought a parent can give a child €300 k without any tax implications?

Sinus pain

Could you lot say you saved it yourself at home? If you’ve taken cash out of the bank at all you could say it was to save - that if you kept it in the bank you’d spend it and that you stuck it in a jar

tricky D

hawkelady wrote: »

Absolutely mad to tell them something that you’ll have to pay inheritance tax on a measly €7k !!
I thought a parent can give a child €300 k without any tax implications?

Risking mortgage approval would be real madness. So too would Revenue penalties and interest.

It's 310k, the 7k comes into effect over that threshold.

Honesty is the best policy imo.

jlm29

hawkelady wrote: »

Absolutely mad to tell them something that you’ll have to pay inheritance tax on a measly €7k !!
I thought a parent can give a child €300 k without any tax implications?

The 3k per year is an allowance for small gifts, totally separate from what’s allowed with CAT or inheritance. But if the gift is greater than €3k in one year, then the extra (in this case €7k) will be considered down the line.

county

You can gift anyone 3k per year be that a family member or a stranger.
If you have a partner that would be 6k tax free and only the 4k would be taxable and that would be taken from your inheritance threshold of 320k, so your new threshold would be 316k.

tomister

Saying its a sale of a car will require proof for the mortgage application. I sold an old car to the parents and still needed a gift letter even though it wasn't a gift.
OP your father would only need to sign a letter for the bank stating it is not to be repaid and that he will not have any rights to the property. Its a standard template that they use and does not require a solicitor etc. Nor do the banks try to trace the money to see its origin. I know you've said he won't sign anything but there is no requirement to go to the bank or to provide any additional information

irishbabe52

Thanks for all the replies! There are no tax issues, the money was taxed when he earned it, he just kept it at home instead of lodging it in a bank 😂
It's true, the bank don't care where it comes from really, and said they just want a letter saying it's a gift and the person giving it has no charge over the property. I'm just nervous of lodging that amount of cash and being questioned over it! I have gotten mortgage approval based on the fact I'm getting a gift of 10k, I don't need to have it in my account until I go to drawdown but would like to get it sorted as soon as possible anyway.
I think I'll give 5k to each of my 2 sisters and get them to transfer me 5k each with a letter saying it's a gift, and then they can lodge/spend it which should be easier with the smaller amounts.

Dolbhad

Lodging it to a bank won’t raise questions. However if it’s in the last 6 months of your statements submitting to a mortgage, it will be raised. I had lodged 5k from my mother which was a gift towards house purchase and mortgage bank picked up on it and asked where did the money come from etc. If that’s the case they will insist on your dad signing a gift letter and also legal document deed of confirmation. Either lodge now and wait until 6 months have passed for statements or have your dad give to another family member to give to you as a gift who will sign the above. However beware of CAT if doing it that way.

tricky D

tricky D wrote: »

Risking mortgage approval would be real madness. So too would Revenue penalties and interest.

It's 310k, the 7k comes into effect over that threshold.

Honesty is the best policy imo.

Unless the op has already received 310k in gifts from his father (which I would say absolutely not the case) then he will pay no tax on the 7k. It doesn’t even need to be declared as it’s such a small amount in comparison to the Group A CAT threshold.

Just tell the bank it’s a gift and there will be no more about it from a lodgment perspective or else do as suggested, spend the money on day to day stuff and save your own salary. I walked into the bank with more than 10k in cash a few days after my wedding and I was barely asked about it, I jokingly said it was wedding presents and there wasn’t another word about it.

Glass fused light

These days try get the bank to change coins into notes without running it through your bank account.

The banks have a legal obligation to prevent money laundering and to report to both the Gardai and Revenue. So technically they'd have to report a €5 lodgement of if it forms part of a pattern of behaviour.

The lodgement of cash has the initial problem for the bank is to establish where the cash came from. Remember that tax evasion is itself a crime. So for an employee who is paid via bank transfer the question arises where did the cash come from to be lodging 10k cash over a number of weeks or months. Without reasonable explaination the bank would need consider if the money should have been taxed but was not

Edgware

Shamboo1801 wrote: »

Lodge it in €1000 batches, give or take a few quid, and you'll have your ten grand lodged in ten or twelve weeks. No questions asked

Theres a babe in my local bank I wouldnt mind giving a daily deposit to

SEPT 23 1989

Over 20k cash and they ask questions

wirelessdude01

My understanding was that a 3rd party could give a gift of up to €16250 without CAT being an issue. For a parent I thought it was alot higher.

Am I wrong in thinking this?

Dolbhad

wirelessdude01 wrote: »

My understanding was that a 3rd party could give a gift of up to €16250 without CAT being an issue. For a parent I thought it was alot higher.

Am I wrong in thinking this?

That’s true. Parent to child is category A and strangers is C. Category A is 320k. But if OP was giving the gift to from dad to siblings, they are at Category A. If it’s passed to him it’s CAT B as that comes from siblings which is around the 30k ish Mark. Don’t know exact figure. You can get 3k tax off anyone every year. That’s the small gift exemption

Atlantic Dawn

Claw Hammer wrote: »

The banks are obliged to question any lodgement over €1.5k. Things have tightened up a lot with anti money laundering. The only thing the /p can do is keep the money in cash and pay some of his normal expenses out of it and buy furniture and other things for the house out of the remainder after the closing.

€15k is the figure they are obliged to report it at, anything below they are not obliged to.

Brussels Sprout

irishbabe52 wrote: »

Thanks for all the replies! There are no tax issues, the money was taxed when he earned it, he just kept it at home instead of lodging it in a bank ��

Just to point out that the above isn't necessarily true. There are no tax implications for your father if he wants to keep the money himself, true. However, as soon as he tries to give the money to other people then capital acquisition tax (CAT) becomes relevant.

As others have pointed out there are lifetime tax-free thresholds, depending on the relationship and time of the gifts. See here for details:

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-thresholds.aspx

You can make an online submission via revenue.ie to register the gift if you want to do it all properly. You'd need your father's PPS number, which given what you have said about him might be tricky to obtain.

blackbox

This may sound like a ridiculous suggestion, but how about telling the truth?

Witcher

Claw Hammer wrote: »

The banks are obliged to question any lodgement over €1.5k.

No they're not:rolleyes: Where do people get this stuff?

In the two banks I've worked in no questions were asked for 10k or under, a cent over that and I had to ask and note it, no reporting was done unless there were several lodgements of similar amounts and no viable source of that amount of cash.

jlm29

blackbox wrote: »

This may sound like a ridiculous suggestion, but how about telling the truth?

If someone gets a gift towards a deposit, banks usually require a signed letter that the money is a gift, and the giver won’t try to make a claim on the property etc. The OP can tell the truth all they like, but the bank will still be likely to have something signed to say the dad isn’t going to come back and make a claim on the house

antix80

irishbabe52 wrote: »

I think I'll give 5k to each of my 2 sisters and get them to transfer me 5k each with a letter saying it's a gift, and then they can lodge/spend it which should be easier with the smaller amounts.

Stop! That's crazy stuff.

The issue isn't the gift, it's just the perception the gift is being used to purchase the house. Keep it separate from the funds you'll be using to purchase the house and you'll be grand.

marko99

Claw Hammer wrote:

The banks are obliged to question any lodgement over €1.5k.

I'm very surprised to hear this! I regularly lodge sums of well over €10k and have never once been asked any questions. What's the source of your information please?

antix80

Witcher wrote: »

In the two banks I've worked in no questions were asked for 10k or under, a cent over that and I had to ask and note it, no reporting was done unless there were several lodgements of similar amounts and no viable source of that amount of cash.

Not true. Tellers have responsibility to report to the mlo any suspicious transactions. It may be a disclosure from the customer who isn't clued in-e.g "look i used to do a bit of work on the side so this draft is from a sterling account in my wife's name".. Doesn't happen as much as it used to but some customers are oblivious as to reporting obligations.

The bank can also run reports of suspicious transactions, like ones just under a limit, or where a lodgment is matched by an immediate transfer out of the same amount.

Op's query isnt about money laundering though. I think people are confusing the 2 issues.

irishbabe52

When I say no tax issues, I mean that it falls below both the thresholds for my father or sisters giving it to me, and unless one of us wins the lotto, we'll never exceed those limits either 😂
I've told the bank I'm getting a gift of 10k, and there's no issue there, they just want a letter saying it's a gift.
My dad doesn't want to sign the letter but both my sisters are happy to give me a letter.
My only concern was the fact that I was going to have to lodge 10k cash into the bank and would I be questioned at that point where it came from, as I really just want to leave my dad out if the whole thing!

irishbabe52

I should say that my account is with one bank and the mortgage is with another so all the mortgage lender will see is the 10k going into the bank.
Will my bank want to know where it came from when I lodge it, is the main question i suppose!
It's mad really, if I was up to anything dishonest I wouldn't be half as concerned about the whole thing!!

lulu1

My father in law was 90 and was the same about banks.

A few years after our punt was changed to euro he gave us a similar amount in old money that was no longer in use.

We were in a dilemma as to what to do about it because it was too much to lose

So we took it to the bank and told them we did a job for a elderly gentleman and he paid us with old notes. They got it changed for us and asked no questions

Brussels Sprout

Brussels Sprout wrote: »

Just to point out that the above isn't necessarily true. There are no tax implications for your father if he wants to keep the money himself, true. However, as soon as he tries to give the money to other people then capital acquisition tax (CAT) becomes relevant.

As others have pointed out there are lifetime tax-free thresholds, depending on the relationship and time of the gifts. See here for details:

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-thresholds.aspx

You can make an online submission via revenue.ie to register the gift if you want to do it all properly. You'd need your father's PPS number, which given what you have said about him might be tricky to obtain.

There is no requirement to declare unless the gift is 80% or more of the applicable threashold so in the ops case he would need to get 248k from his father before a declaration was necessary.

Brussels Sprout

Carl Shy Extinguisher wrote: »

There is no requirement to declare unless the gift is 80% or more of the applicable threashold so in the ops case he would need to get 248k from his father before a declaration was necessary.

That surely can't be right as it would leave a massive loophole open. People could just exchange money in allotments of less than 80% of the threshold repeatedly and avoid CAT that way.

How else would Revenue be able to keep track of your aggregate total if you didn't declare it?

Brussels Sprout

Brussels Sprout wrote: »

That surely can't be right as it would leave a massive loophole open. People could just exchange money in allotments of less than 80% of the threshold repeatedly and avoid CAT that way.

How else would Revenue be able to keep track of your aggregate total if you didn't declare it?

The 80% rule is clearly stated by revenue themselves: https://www.revenue.ie/en/gains-gifts-and-inheritance/completing-your-gift-or-inheritance-tax-return-it38/how-do-you-know-if-you-should-file.aspx

Revenue don’t keep track of gifts of inheritances, you could easily exceed a threshold, don’t declare it and pay no tax and it would never be known to revenue and you may get away with it but if you were ever audited it would then come to light very quickly and you would be caught out very fast.

My own opinion is CAT should be abolished completely for any gifts/inheritances between any family members as it’s a real bad bas*ard of a tax.

Claw Hammer

irishbabe52 wrote: »

I should say that my account is with one bank and the mortgage is with another so all the mortgage lender will see is the 10k going into the bank.
Will my bank want to know where it came from when I lodge it, is the main question i suppose!
It's mad really, if I was up to anything dishonest I wouldn't be half as concerned about the whole thing!!

If the mortgage lender sees 10k going into the bank they will ask where it came from. They will want statements. The bank you lodge it to, if it is in cash will certainly query it.
Given your comments i now don't believe you story. there ae 3 scenarios:
1. you are telling the truth.
2. your earned money you never declared and kept in cash.
3. Your father earned money he never declared and kept in cash.

It would thing the chances of the 1st at about 10%.