Gift Splitting Rules and Spouses

07 February 2021


This blog relates to the area of the rules of gift splitting. You probably remember section 8 of CATCA 2003 which prevents avoidance of CAT by using a series of gifts.

So for example, Sean wishes to gift a new BMW (worth €70,000) to his grandson Patrick for his 19th birthday. So instead he gives it to his daughter Mary who in turn gives it to her son Patrick because she heard of something called a class A threshold. Naughty Sean and Mary! The gift is treated as a gift from Sean directly to Patrick.

One should be careful about this in husband and wife situations. So for example, Tina is friends with Andrew and his wife Susan. She wants to gift €30,000 to Andrew as a thank you for all his help over the years. Andrew with the benefit of advice says that the best structure of this payment is €15,000 to him and €15,000 to his wife Susan, as they both have available Class C thresholds. Even though they are married Andrew and Susan will still be caught by the gift splitting rules. They must hold onto the €15,000 each and wait the normal three year period. After that they can gift the sums between them tax free in the normal way.