One very important motive for gifts is to pass on cash or assets to a younger generation. Often these may be valuable e.g. property or shares in a family business.

However, the tax implications may be complex and require care to avoid unnecessary liabilities.

Why now?

Asset values remain low, particularly for property. Gifts are taxed based on current market value. Therefore, if the value of an asset were expected to increase over time, it would be favourable to transfer it when values are low

Making a gift will also be a taxable event for Capital Gains Tax. gain, market value is the basis for the tax. On this basis, property in particular may well show a loss rather than a gain. This would remove the CGT liability.

It is important to note that if the gift is in the family it will be to a connected person. Therefore, any loss cannot be used against outside gains. It can only be used against a gain made in a transaction with that same person e.g. if you transferred two assets to your child and one gained while the other lost.

Capital Acquisitions Tax

The 2012 Budget reduced the child threshold to €250,000 and increased the tax rate to 30%. However, a number of important reliefs remain intact for the present.

Two particularly useful ones are

• Business Property Relief
• Agricultural Relief

As the names suggest they are aimed at the transfer of businesses and agricultural property.

These reduce the taxable value of the property by 90%. If you transfer a business worth €1,000,000 the taxable value will be €100,000. the tax saved at 30% would be 270,000.

Qualifying for these reliefs

There are complex requirements to qualify for these reliefs which are beyond the scope of this brief outline. A professional tax adviser can guide on how best to use the reliefs.

• passing on your business
• helping your business to progress
• providing for your family’s future
• ensuring the best division of assets for the well-being of beneficiaries

It is important to plan because

• many decisions may have significant tax consequences
• decisions may be difficult to reverse
• if you fall victim to incapacity it is best to have a plan in place

What is CAT charged on?

CAT is charged on

• inheritances
• gifts including assets transferred at less than market value

What is the tax rate?

CAT is currently charged at 30% of the benefit

What is the value of the benefit?

This is the value of the money or assets less

• consideration given
• liabilities attached e.g. a mortgage

Exempt thresholds

You can use exemption thresholds based on lifetime aggregates of gifts and inheritances within three classes. These classes depend on the relationship between the provider of the gift or inheritance, known as the disponer, and the beneficiary. These thresholds are

There are ant-avoidance provisions which prevent manipulation of the thresholds by gift splitting e.g a grandparent gifting to their child tpass on to the grandchild at the high threshold.

Small Gift Exemption

A person may receive gifts up to 3,000 each from any number of givers in a single year without incurring a tax liability. No declaration is required but records should be kept.

Capital Gains Tax

When you give a gift you may also trigger a Capital Gains Tax exposure if the gift is of a chargeable asset e.g shares, property.  The market value of the asset will be taken as the consideration received.

If the tax is on the taxes are on the same vent you can the CAT will be credited against the CGT payable. Therefore you will not be taxed twice. For example

If you gift shares valued at €500,000 to your child and the cost you €150,000 the effect will be

Cautionary note

The above points are meant to be helpful. These tax issues are very complex, with many traps for the unwary. proper professional tax advice should be sought before completing any transaction

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As such it is entitled to capital allowances against taxable profits

Business should review this to see if they can make a claim

there are mobile traders not established in Ireland e.g. from Northern Ireland and they will trade for less than 28 days at the venue

Where VAT on an activity is due in the place where it is performed. For example, if a venue owner allows a British promoter to run a concert at his premises, the VAT is due in Ireland.

The premises owner  notify Revenue 14 days in advance of the event or trading activity.

If they do not, Revenue may make them jointly liable with the trader or promoter for any VAT due. If the promoter fails to pay the provider will have to foot the bill

 This plan met strong opposition on the grounds that it discriminated against non-residents. The opposition was supported by some French senators.

http://www.ft.com/intl/cms/s/2/9d791744-9dae-11e0-b30c-00144feabdc0.html#axzz1QTMeXucx

Discrimination against non-residents would appear to be against EU legislation. owners should consult their French advisers.