Physical Cash Gift from Parents towards Deposit

00adam00

Hi all,

Looking for some advice here.

I have recently gone sale agreed on a property and my parents are giving me a physical cash gift from their savings of €40,000, I’m just wondering how is this usually deposited?
I have a gift letter signed and submitted to BOI but I’m not sure on the next steps, will this be flagged with the bank if deposited?

Any help is appreciated!

Thanks

Stanford

You will have to account for this to Revenue to make sure you are not liable for Inheritance Tax

Best if your parents can give your Solicitor a bank draft as I'm sure the Solicitor will be handling the purchase price with the Vendor's Solicitor.

coylemj

You mention a 'physical cash gift' - do you mean it will be in hard currency?

If it will be, I would phone your branch in advance and ask them to suggest a good time of the day to lodge that amount of cash. It will also serve to alert them that that amount of money is incoming. Your branch may be cashless on certain days of the week or always, bear that in mind so you don't end up with a sackload of cash that you will need to hang on to for a few days while you find a branch of your bank to take it.

If they're going to transfer it to you electronically, BoI have a limit of €20,000 per working day so they will need to do it in two tranches.

Happyhouse22

https://www.boards.ie/discussion/comment/122445815#Comment_122445815

Revenue rules state that it has to be reported if over 90% of the relevant threshold, which wouldn’t be close here. Would rules be different because the gift is cash?

I would have thought if revenue were interested it would be to check appropriate tax was paid by the parents on the money, rather than anything to do with the gift

Kurooi

Flagged by the bank on what purpose?

If it's as suspicious activity, maybe, depends what traffic your account usually has, they are likely to ask what the source of the funds is for their own aml.

If it's about your mortgage, yes any underwriter should easily spot a 40k deposit. That's normal provided you still demonstrate your ability to save.

ahnowbrowncow

https://www.boards.ie/discussion/comment/122445861#Comment_122445861

You're right, except it's 80% of the threshold.

the_amazing_raisin

I'd suggest your parents transfer the money directly to your account rather than giving cash. As well as being a lot simpler it's also vastly more secure, kind of hard to rob an electronic transfer

You shouldn't be liable for tax but your parents might need to sign a letter to say the money is a gift and they aren't effectively buying part ownership in your house. There's a specific term for it like declaration of no interest or something

Your solicitor will be able to advise you on this. I'd suggest you get that rolling soon because my mum had to get her solicitor to witness the letter which could take some extra time

Stanford

The threshold for Group A is €335,000 (i.e. parent to son/daughter) but this is a life time threshold and the gift of €40,000 will be deducted from that so I don't understand your "90%" comment. Cash is treated as a gift like every asset.

As for the parents attracting Revenue interest this is possible unless the parents have acquired the cash (or assets of its value) legally with all relevant taxes paid.

The sum of money here is large enough to have a word with a good tax accountant for advice.

Victor

https://www.boards.ie/discussion/comment/122446364#Comment_122446364

If the threshold is €335,000 and a person receives more than €268,000, then Revenue need to be notified, so that they can examine the case and check for previous capital acquisitions, if the person has calculated things correctly and if there are anomalies.

Atlantic Dawn

https://www.boards.ie/discussion/comment/122446294#Comment_122446294

Money laundering, if depositing €10k or more in physical cash the bank legally have to report it.

A transfer from one account to another would leave a better paper trail but again the cash would need to be entered in to the banking system via the parents account so same issue with reporting the cash.

sportsfan90

https://www.boards.ie/discussion/comment/122446436#Comment_122446436

There's no rule to say any cash deposit of €10k or more has to be reported by a bank for anti money laundering purposes. If that was the case then someone with something to hide could simply do deposits of say €9,900 at a time. It's more to do with unusual transactions for the account holder.

I don't know the exact criteria (because they don't publish them obviously) but the figure could be a lot lower than this for some people depending on their financial situation, and a lot higher for others for the same reason. For example, I'd imagine there would be different levels of suspicion and reporting done for someone of JP McManus's wealth looking to deposit €50k compared to someone who never had a penny suddenly arriving with a bag €7-8k in notes.

To the OP, if you are referring to €40k in physical money be prepared for questions to be asked and make sure there's a paper trail of where you (and your parents) got the money.

extra-ordinary_

The bank will be happy with the gift note to explain the deposit, and any tax liability is your own affair.

capefear

get both your parents to give you €3000 each so €6000

Get your parents to do the same again for your partner. So you have now got €12000 and your inheritance tax threshold is still in tact.

antimatterx

Can you lodge some and keep alot for things like furniture. Especially if it was earned off the books, you don't want to draw attention to your folks.

JVince

https://www.boards.ie/discussion/comment/122446436#Comment_122446436

No they don't. That's totally wrong.

They simply have to know the source just in case of an audit.

Only if they are suspicious of a transaction and there is no valid source of it, do they need to report it.

Stanford

https://www.boards.ie/discussion/comment/122454370#Comment_122454370

I don't see anywhere where OP mentions a partner?

Atlantic Dawn

https://www.boards.ie/discussion/comment/122454439#Comment_122454439

The issue at hand is how the parents sourced the cash, not establishing the link between the OP proving he sourced the money as a gift from his parents.

Maxface

The bank will ask where the money came from, just state it is from your parents towards a house purchase. Very normal, no 10k money laundering limit. If it is flagged somewhere, so be it. It is in no way an issue to do what you plan on doing.

CramCycle

https://www.boards.ie/discussion/comment/122454274#Comment_122454274

This, not one person ever questioned or queried a very generous gift from my parents. And it was as suspicious as f*ck as I can't imagine my parents pulling that cash out of their arse easily.

Long story I wouldn't stress about it, either into your account and in to the estate agent for a deposit or into the solicitors account, so long as your parents or yourself aren't under investigation for something and/or if queried, you actually haven't done anything wrong, you are grand.

sportsfan90

Banks are perfectly happy for gifts like this with an accompanying note to say that it's a no strings attached gift and it is not towards a part ownership of the property for them.

The issue is arriving with €40k in physical cash. It's not the bank that would need convincing that it's all above board, it's Revenue. If you arrive into a bank with large amounts of physical cash notes to deposit they'll most likely simply ask you its source of the money and carry on with your request. If it's deemed unusual (which something to this scale almost certainly would be) then it will be flagged to Revenue. This does not necessarily mean that Revenue will come knocking on your door, but it will be kept on file should they ever want to investigate.

If the OP tells the bank when depositing that they received it as a gift from their parents, and Revenue do decide to investigate, then the parents will be involved and could be asked to provide documentation to show where they got that amount of physical cash to hand over (eg, records of bank/ATM withdrawals totaling that amount). Some people think they're clever and say any old shite like they sold a car and the person that bought it paid in €50 notes, until they're asked to prove they had ownership of such a car that got them that amount of cash.

So my advice to the OP is whatever you say to the bank make sure there's a paper trail to back it up for down the line.

kirving

https://www.boards.ie/discussion/comment/122454777#Comment_122454777

A couple of my extended family work for Revenue, and Customs, and some of the idiotic stories people tell are downright hilarious.

Not that the OP should have any issue in the end, but €40k cash is going to bring questions. I wanted transfer over €10k from my AIB to buy a car. If it was going to the garage directly, the bank had no issue whatsoever, but did ask a few questions as I wanted to move the sum to a Revolut account in my own name, so I could be sure of an immediate transfer, and minimise FX fees.

extra-ordinary_

https://www.boards.ie/discussion/comment/122454844#Comment_122454844

Not that the OP should have any issue in the end, but €40k cash is going to bring questions

The only question it will bring is, "have you a signed gift note for that deposit?"

sportsfan90

https://www.boards.ie/discussion/comment/122454953#Comment_122454953

If it was a transfer from bank account to bank account then yes. Different story when it’s €40k in physical cash brought in envelopes to the bank branch.

extra-ordinary_

https://www.boards.ie/discussion/comment/122454968#Comment_122454968

Ah yes, when I read the OP I must have skimmed over the "physical cash gift" part", and would question why the parents cannot just make a bank transfer.

witchgirl26

https://www.boards.ie/discussion/comment/122454244#Comment_122454244

So banks do have to report large sums of physical cash deposited to comply with AML legislation. They will often set their own internal figures for this but a lot will have a limit like €10,000 whether that is done in 1 deposit or a series of linked deposits (so €5k one day, €3k the next & €2k the day after). €40k in physical cash being deposited would definitely trigger some AML questions. And not just for audit point of view but legal requirements.