Tax implications of a €40k gift from parents, and then bringing that money to the UK

Is that get a loan from the parents and pay them 3k a year back or is it 3k a year loan from them cgt free?

Ireland

Irish Revenue don't particularly like the write of loans using the small gift exemption. Best to get an accountant or tax advisor to help structure that and still it will carry risk.

There was a case a couple of weeks ago where they rejected the small gift exemption being claimed in a similar way.

It's perfectly within the legislation to use the initial amount against the lifetime exemption and transfer 6k cash per year if there is a future amount expected to be gifted/inherited which exceeds the lifetime exemption.

UK

Need to check against local tax. But in a nutshell, no gift tax unless your parents die within 7 years, in which case portion is added to their estate and taxed as an inheritance.

What I wrote has nothing to do with informing Revenue?

I'm fairly sure that the OP needs the cash now and not in 10 years. Ideally this would have been put in place years ago for them but I suspect opportunity has been missed.

All the OP needs is a structured loan arrangement where they make a scheduled payment including appropriate interest payment and it is subsequently returned to them. Revenue challenge lots of things but as long as it is documented properly at the time and not retrospectively they won't beat you.

Admittedly, the problem with it being described as a loan is that you have to declare it as a loan on a mortgage application.

It's not tax dodging, it's being tax efficient. Yes, effectively this requires the loan repayments to be gifted back to him annually as he repays off the loan. If he "pays back" a total of €60000 (6000 for ten years assuming that he has a partner) that will cover the principle+interest

It means he has access to the full amount up front without the associated tax bill.

There will be no tax liability right now. When it comes to your overall inheritance in the future it will be factored in then and obviously you may have tax to pay depending on what the upper limit is at that time. Your mortgage provider may require a letter from your parents which states that it is a gift and they forgo any interest in your property. This may be important - if you say it is a loan from your parents ( to try and avoid future tax liabilities on your inheritance as has been suggested), the mortgage provider will factor in the repayments of this "loan" and you may not be able to borrow as much as you want to. The upper limit for inheritance before paying any tax is likely to stay very generous - today a gift of 40,000 will still leave a 285,000 potential inheritance with no tax liability.

If / when you inherit from a parent, revenue require you to sign a statement as to whether or not you have received gifts from that parent in the past and for how much. At that point your liability or not for inheritance tax is calculated.

Ok and if during the probate of say your late mothers will, let’s say your father died five years earlier than your mother & everything transferred to your mother at that time & you previously received a gift of say 40k twenty or thirty years ago & you sign a statement saying no gifts received, do they actually investigate your statement & every similar statement signed each year?

What is the point of that?

Yes, I did. Do you understand why you cannot issue a loan & forgive annual amounts to avoid CGT or to preserve threshold?

Did you use AI? Bizarre reply.....

Otherwise, get to the point if you have one. What makes you think Revenue will allow you to treat a gift as a loan?

Yes, S811.

Also, before Revenue apply s811, a loan is a loan, to be repaid, not given in anticipation of giving future gifts to write it off. What you are proposing is a gift, labelled a loan but you are deferring the legal entitlement to the gift in order to attempt a tax advantage. The movement of cash to and back from the parents is nonsense. Not going to work on the most basic level, so not realistic.

You can label it legally, no legislation prevents you from doing so, but no legislation or caselaw allows you to gain a tax advantage from that label.

There is a 100% compliant alternative method.

All legislation and revenue guides are available on the internet and possibly some significant caselaw. Knowing with certainty what legislation or guidance can be applied in a particular situation takes training and experience (dealing with Revenue). Hence do not DIY tax advice or accept it from anyone without being a suitably qualified & experienced tax advisor/ accountant.