Share your wealth

Sharing your wealth

Family at table

Many clients want to make gifts to their loved ones, but often want to retain control over how the money is invested, especially when they are gifting to a child.

Help your clients save for their family while maintaining control over the investment.

The trustees, (usually parents or grandparents), have full control over how the money is invested.

The person receiving the gift may benefit from the Small Gift Exemption and Capital Acquisition Tax thresholds that apply today.

 

Capital Acquisitions Tax (CAT)

If your client receives a gift or inheritance, they may have to pay Capital Acquisitions Tax.

Gifts and inheritances can be received free from CAT up to a certain amount. The tax-free amount varies depending on your client's relationship to the person giving the gift. There are three different groups (Group Threshold). Each group has a threshold that applies to the total amount of gifts and inheritances they have received in that group since 6 December 1991.

 

GroupBeneficiaryTax-free amount
A Child (including adopted child, step-child and certain foster children) or minor child of a deceased child of the person making the gift €310,000
B Brother, sister, niece, nephew, grandchild of lineal ancestor or descendant €32,500
C All other relationships, other than those mentioned in A or B €16,250

CAT thresholds from 12 October 2016

CAT is currently 33%*

 

Small Gifts Exemption

A small gift is any amount up to €3,000. Your client can give a gift of up to €3,000 each to any number of different people in a calendar year. This gift will not reduce the reciptient's Group Threshold*.

This Small Gifts Exemption can be a useful tool when planning how to share your client's wealth with their family in a tax efficient way.

For more information, contact your business manager.

*As at November 2017

 

What is a Bare Trust?

  • It’s a simple trust that can be used to hold assets (investments) on behalf of a child or grandchild (beneficiary)
  • The investments are controlled by a trustees (usually parents or grandparents) on behalf of the child until they reach 18
  • Once the trust is complete, the original investment and any gains belong to the child
  • The trustees should tell the child they hold these assets on their behalf. If the child requests control of the assets when they reach 18, the trustees must hand these over
  • If the trustees want to continue managing the trust once the child reaches 18, the trustees and adult child should mutually agree this

Why use a bare trust?

  • It may be a tax efficient way of passing money to family – by using a bare trust, the child (beneficiary) can avail of today’s CAT thresholds and small gift exemption
  • Clients can select who they want to benefit from their gift today
  • If the gift grows in value, because a bare trust has been set up, then any growth is treated as belonging to the child
  • If your client is a trustee, they can manage the investment on behalf of the child until they are 18, or, by mutual agreement with the adult child, for longer
 

Why invest in a life investment policy?

  • Your client's gift has the potential to grow
  • Easily diversified
  • Potential for higher returns than deposits
  • Benefit of gross roll up
  • Easy - the life company is responsible for deducting any tax from the policy, not the trustees
  • The net payment is the policyholder's final tax liability on their investment gain
 

Download documents

Sharing your wealth - investing for family (customer)

 

Investing for children - setting up a bare trust (adviser)

 

Bare Trust form

 

Existing trust declaration by authorised signatories or trustees

 

Our Savings and Investment products

We have regular and lump sum products for your clients to choose from.

Synergy Investment Bond

Find out more

Synergy Regular Invest

Find out more

 

Contact us

 

Need help?

Get in touch with our Technical Solutions team by phone or email

Janice Nevin
Technical Consultant
(01) 639 7620

janice_nevin@standardlife.ie