Jameson Financial can advise you on Annual Gift Tax Exemption Savings Plans. By setting up one of these plans for children, grandchildren, godchildren, nieces or nephews, you can build up a fund for your chosen beneficiary, so that he or she can avail of the annual Gift Tax exemption of €3,000 from any one individual or €6,000 from a married couple.
At a glance, the current Capital Acquisition Tax thresholds are €335,000 from a parent to a son or daughter or €32,500 to a grandchild or niece or nephew. The threshold for bequests to others is €16,250.
However, in any year, the first €3,000 gifted to any person is not taxed and does not reduce the threshold. As noted, it also applies from any one person to another, so two parents can gift €6,000 to any one of their children. Gift Tax Exemption Savings Plans can be set up as a means of availing of this relief; they are written under Trust with the beneficiary named as legal owner of the proceeds of the policy. Provided the annual contribution does not exceed the exemption limit, the beneficiary will not incur a tax liability and their over capital Acquisition Tax threshold will not be reduced.