Can I give my nieces funds without them having to pay tax?
Charlie Weston Your Questions
QI AM in my mid 60s and I have just sold my home to downsize. I am looking at some inheritance planning. I am widowed and I don’t have children, but I am very close to my two nieces. I have significant savings now as a result of the house sale and my pension, and I am considering setting up joint bank accounts for myself and both my nieces. I might contribute €3,000 to each account annually, with the funds only to be accessed by my nieces after my death. Would the girls then have to pay inheritance tax on the final amount?
AYOU can give a gift to each of your nieces, or to anyone, of €3,000 annually, which would be tax-free.
You can also leave each niece up to €32,500 as a taxfree inheritance upon your death, according to Joanna Murphy, CEO of Taxback.com.
It is understood from your question that by saving €3,000 annually on their behalf, you are hoping that if the final balance amounts to more than €32,500, they will not have to pay tax on it.
This would be the case, but only if you set up the accounts in their names only, Ms Murphy said.
You cannot be a joint account holder, and they must have access to the monies in the year you gift them.
So while you would rather they keep the money as an ‘inheritance’ for tax purposes, for them to avail of the yearly small gift exemption, you would not be able to withhold access to the funds until your death.
QIN AN effort to reduce my car insurance premium, I recently contacted my insurer to find out about adding a named driver, my sister. However, I was surprised to hear it would actually make my policy more expensive than my current solo policy to add her, even though she has a full licence for the past two years. I thought that adding a learner driver might increase my premium, but not someone who has passed their test.
ADIFFERENT insurers have different views on adding a named driver to your policy. Adding a named driver can indeed often reduce the cost of your cover.
However, there are instances where it might also make it dearer to add a named driver than to get a solo policy, and the number of years a person has
INVESTING money in a new car is an important decision and it is definitely worth measuring any investment against your personal priorities, according to Mr Hehir.
In terms of the pros of a new car, one of the most beneficial aspects is the money saved on maintenance and servicing. Outside of a regular service, it will probably be years before you have to have something significant fixed or replaced and even then, it may well still be under warranty. Newer cars are often safer. They have lower CO2 emissions, which is good for the environment, but also for your pocket, as motor tax on cars manufactured after July 2008 is calculated according to emissions, not engine size, and is significantly cheaper as a result, Mr Hehir added. Financing on a new car can be a great way to spread the costs, but be careful what you sign up to and make sure you read the fine print, particularly when it comes to personal contract purchases (PCPs). An older car will be cheaper up front and can be a great option, providing it is bought from a reputable dealer with a full service history. A car that is five or six years old will still pack a lot of punch in terms of features and should continue to run smoothly for years, with regular servicing and maintenance. Remember that certain brands and models hold their value more than others, and that shopping around is a must. Visit different dealers to see what they offer for the same models. held their licence for will certainly make a difference to the quote, according to managing director of InsureMyCars.ie, Jonathan Hehir.
It is likely that the primary reason why your premium quote would have increased is that adding a driver who has held their licence for only two years denotes limited driving experience and would generally push your premium up, Mr Hehir added.
QI AM looking for a new car and am not sure whether to go for something second-hand or look into financing options on a new model. There seem to be a lot of pros and cons, with the main advantage of a newer car being the cheaper tax and lower maintenance. At the same time, it’s just a car and it will depreciate as soon as it leaves the forecourt.
A