Is a loan from a family member subject to tax?
In relation to your final question, a loss arising on capital gains can be carried forward until such time as the loss is offset by future capital gains. There is no time limit for that.
Can you clarify your advice about gift tax?
You wrote some time back about gift tax and the annual tax-free thresholds. I think you missed the point Mr MA was raising, which was also a question in my mind, so I was reading your answer carefully.
That question is – does the €3,000 annual tax-free gift come into the computation of the €250,000 lifetime limit of gifts to a child?
I presume it does not – ie, you could gift €3,000 per year for example, 10 years, and then gift €250,000 on your death (or otherwise) all tax free.
So the lifetime limit is €250,000 plus as many annual €3,000 as you manage to do?
Maybe you could clarify this please.
Mr P.G., email
Sorry if there was any confusion. I thought I had gone through it in some detail.
The situation is straightforward. First there is an annual exemption – currently €3,000. This can be paid by any donor to anyone, not necessarily a family member.
It can be paid each year to the same people or to any other people and no tax bill arises either for the person giving the “gift” or for the recipient(s).
The only exception is where Revenue suspects that exempt gifts are being paid to a person or persons to be channeled to a third party who has already availed of the exemption. For instance, if you “gift” your child €3,000 this year and then also gift a similar sum to other people with a view to them in turn gifting your child, a liability will arise.
Leaving that scenario aside, the €3,000 “small gift exemption” is entirely separate from any liability under the lifetime threshold (currently €250,000 between a parent and a child).
So, as you suspect, you can gift a sum to an individual under the small gift exemption annually for as many years as you choose
and it will not in any way affect your “lifetime” gift tax (Capital Acquisitions Tax), which in relation to a child of yours is €250,000.
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