Wedding payments not subject to tax

Q&A: Q Could you please enlighten me regarding my daughter's wedding next year. It will cost approximately €30,000. If I pay for the wedding, will the tax man also get a slice of this?

Mr B.G., email

AWhile many couples now finance their own weddings, the more traditional arrangement where the father of the bride picks up the tab is still an option for some. I assume your concern is whether such an investment would be deemed to be a gift under the capital acquisition tax rules.

I have never some across a case where it has been viewed as such by the tax authorities although I suppose, in certain circumstances, it might be seen as a gift. I think you can rest assured you will not face a tax liability in this instance.

Q A piece in your paper recently said that Ulster Bank, where I have a deposit of around €100,000, was not covered by the Irish bank guarantee. However, the bank and the Department of Finance both tell me that it is. Which is correct?

Mr M.F., email

AThe confusion rests with the fact that there are currently two overlapping guarantees applying to Irish bank savings.

The Government has given a guarantee over all deposits with seven named Irish institutions – AIB, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent, EBS Building Society, Irish Nationwide and Postbank – for two years, expiring at the end of September 2010.

Separately, there is a deposit protection scheme which now guarantees the first €100,000 of money deposited by any individual with a bank operating in Ireland.

This has no time limit and does apply to Ulster Bank and other foreign institutions taking deposits in Ireland. Your €100,000 savings are covered by that scheme.

Q Can you please confirm what I understand from your article on CAT last week. The tax regulations applying to gifts to children during a parent’s lifetime (up to €434,000 each tax free) are the same as those applying to inheritances willed after a parent’s death.

Mr J.Q., Dublin

AThat is so. But bear in mind that it is a cumulative threshold. You cannot gift, say, €430,000 during your lifetime and a separate €430,000 after a death.

Please send your queries to Dominic Coyle, QA, The Irish Times,24-28 Tara Street, Dublin 2, or by e-mail to dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.