Patrick O'Donovan (Limerick, Fine Gael)
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229. To ask the Minister for Finance the tax implications for a parent, who wishes to financially assist their child with mortgage repayments, where the mortgage is half-paid but the child is currently unemployed; and if the parent will be penalised in the same way as a parent helping a child with a deposit, under the new guidelines. [7826/15]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that where a parent gives money to a child to assist with mortgage repayments, it is a gift for capital acquisitions tax purposes. In this regard, it is no different to money gifted to a child towards a deposit on a house. Accordingly, the to which the Deputy refers (Guide to the CAT treatment of receipts by children from their parents for their support, maintenance or education) apply to a gift of money to assist with mortgage repayments in the same way as to a gift towards a deposit on a house. The guidelines are available on the Revenue website. Therefore, the first €3,000 of such a gift to a child in any year is exempt from CAT under the annual small gifts exemption.  This means that a parent can give a gift to a value of €3,000 to a child (or to anyone else) in each calendar year without any CAT charge arising. Where relevant, two parents can make gifts to a child to the value of €6,000 in any year free of CAT or could, if they wished, gift €12,000 in total each year to each son or daughter and to their respective partner (e.g. fiancée, fiancé, daughter-in-law, son-in-law) free of CAT.

If gifts in excess of the annual small gifts exemption of €3,000 are taken in any year, there would be no liability to CAT unless the aggregate amount of gifts and inheritances (if any) taken by the child from his or her parents (not counting small annual gifts of up to €3,000 from each parent, which are exempt) exceed the child's life time tax-free threshold of €225,000. Where the aggregate of the gifts and inheritances received by a child from parents exceeds €225,000, only the excess is charged to tax as demonstrated in Example 1 of the Revenue guidelines.