I wanted to share a straightforward opportunity that many families are using to pass on wealth completely free of tax — the Small Gift Exemption.
Under Irish tax law, any individual can receive up to €3,000 per year from any single person, free of Capital Acquisitions Tax (CAT). A grandparent, for example, can gift €3,000 to each grandchild every year — entirely tax-free and with no impact on the child’s CAT lifetime threshold.
The real power comes with consistency:
- A couple can gift €6,000 per year to each child or grandchild (€3,000 each)
- Over 10 years, that’s €60,000 passed on — tax-free
- Invested in a structured savings plan, the growth potential is even greater
We offer savings plans specifically designed to make the most of this exemption, making it simple to gift regularly in a structured and meaningful way.
Case Study:
A husband and wife, both in their 50s, wanted to help their three adult children financially but were conscious of future inheritance tax implications.
On our advice, they decided to gift €6,000 to each of their three children on an annual basis for five years. Each gift was placed into a structured savings plan on the children’s behalf. They pay into this savings plan on a monthly basis – paying €500 per month, per child.
After 5 years, the results spoke for themselves:
- €90,000 passed on across the family — completely free of CAT.
- Zero impact on each child’s CAT lifetime threshold.
- The savings plans generated additional growth over the period, meaning the real value passed on was even greater.
- The parents had peace of mind knowing their wealth was being transferred in a planned, tax-efficient way.
- Their children were thrilled with the outcome. The eldest used the proceeds to fund the deposit on their first home. The other two children continue to have their funds invested, growing further for whatever the future holds.
“We didn’t realise how simple it could be. A small, regular gift each year has added up to something really meaningful for our kids. There is paperwork to be completed – but Gráinne guided us through the process”
#Smallgiftexemption #structuredsavingsplan #financialplanning #mindyourwealthmindset
