CAT Guide - Gift-splitting
Gift-splitting is best explained by way of an illustration. Where Disponer (B) makes a gift to Beneficiary (C) and in the three years prior to or since making the gift to Beneficiary (C), Disponer (B) had taken a gift from another disponer, Disponer (A),
then the gift taken by (C) is deemed to have been taken from (A) and not (B).
Example
In January 2009 a father, Disponer (A), gifts to his son (B) €250,000. In October 2009 the son, Disponer (B), gifts to his daughter, Beneficiary (C), a house valued at €250,000. The daughter, Beneficiary (C), is deemed to take the gift of the house from her grandfather, Disponer (A) and not from her father, Disponer (B). Therefore the threshold applying to the gift to the daughter from her father is Group B, not Group A.
However, where it can be shown to the satisfaction of the Revenue Commissioners that the gift in January 2009 was not made with a view to facilitating the making of the October 2009 gift, the October gift is treated as being made by (B), the father of (C).
An example of this scenario is:
Father transfers house to his son in May 2011. The son requires a mortgage to renovate the house or to build an extension. The lending institution would probably insist on the house being placed in the joint names of the son and his wife or civil partner before advancing the loan. The son transfers a half share of the house into his wife or civil partner’s name in July 2011. In these circumstances Revenue would most probably accept that the first gift, i.e. transfer from father to son was not made to facilitate the second transfer, i.e. son to spouse or civil partner.
July 2011