Q – I am wondering can each parent gift €3,000 a year tax free to their children ? I was told only one parent is allowed. Are such gifts counted in the current € 400,000 inheritance exemption, free of Capital Acquisition Tax (CAT) to which each child is entitled to? And are those thresholds likely to increase over the coming years ?Mikey – ClareGalway Co Galway
A – Thanks Mikey. Those thresholds were last increased in October 2024 in the Budget. The A category used to be in excess of € 542,000 back in 2009 ! You can gift not just your child but any person the sum of € 3,000 each year tax free under the Gift Tax legislation. This is completely separate to the inheritance / CAT thresholds and is NOT included in any aggregate. The three current CAT thresholds are
A – parent to child (€ 400,000)
B – grandchildren, nephews/nieces, brothers/sisters (€ 40,000)
C – all others (€ 20,000)
There are other groups within these categories which you can check the link http://www.revenue.ie/en/tax/cat/thresholds.html To simplify it, you can give anyone, me included, € 3,000 every year plus € 20,000 as a gift and my inheritance from you. Your wife can also give me € 3,000. Remember you can only receive ONE inheritance in each section tax free – the SECOND one is taxable. If the parents are divorced, the child can only benefit from the inheritance ONCE as both would not be allowable.