I want to give my daughter €100,000 to help her buy a house. If I need to try to access the Fair Deal scheme for future needs, will that sum be added back into my funds by the powers that be, as if it had never left? And what is the time limit on this?
Ms D.F.
Helping your daughter buy her home, given that you have the financial resources, is no doubt very welcome news for her. However, you are right to consider what the longer-term implications might be.
If you do require nursing home care in the medium term and seek to avail of Fair Deal financial support for that, the HSE will consider any assets you gave away over the five years before your application to still be part of your assets.
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So if you were making a Fair Deal application today, they would look back to anything given since December 23rd, 2020. If you were to give your daughter €100,000 before the end of this year, it would count as yours until the end of 2030 for the purposes of Fair Deal.
On a separate issue, this €100,000 – or at least €97,000 of it – will count against your daughter’s lifetime limit of €400,000 tax-free in gifts and inheritances from a parent.
That’s unlikely to be a problem – not least as now is the time of her greater need – but just be aware of it.
The other €3,000 will fall under the small-gift exemption where you can give someone up to €3,000 in any year with no tax implications. If you were to give her some of the money before the end of this year and the balance in 2026, you could get two years of small-gift exemption. This would mean only €94,000 counts against her lifetime tax-free threshold.
Solar panels
My wife and I installed 20 solar panels on our house in 2023. The cost of the installation was paid from our joint incomes and savings. We file a joint tax return each year.
In any year, we generate quite a bit of electricity and earn well in excess of €400 each year. The energy bills are in our joint names, as are all our bank accounts etc. My question is: are we both entitled to the €400 tax-free exemption? The legislation refers to individuals and not properties.
Mr M.T.
When I was writing recently about tax credits on solar panels, I mentioned that the Government allows you to make up to €400 from selling energy back to the grid under the microgeneration scheme. That figure was €200 in 2022 but has been €400 for each year since then.
What I forgot to mention, and was reminded of by a reader, is that this credit applies to anyone named on the bill. So if the bill is in both your names, each of you is entitled to earn up to €400 from your surplus energy.
As Revenue guidance notes: “Where more than one individual is named on the electricity bill, each individual can avail of the exemption – i.e. the exemption is not split between them.”
UK pension
Many thanks for your great articles and helpful advice about buying back pension years from the UK. My question is whether I can now claim for this on my tax return.
I bought back years at the higher rate and paid €18,000 just before the deadline this year.
Ms A.K.
This is not like a personal pension where you can claim tax relief against contributions. Think of it more like your PRSI, our own national insurance scheme, where you pay an amount according to your earnings but are not entitled to any tax credit or relief.
You’ve done well in buying back the years of UK pension coverage but you will not be entitled to claim any tax back. And even if you could, the Revenue would not take kindly to crediting you for contributions to another country’s social insurance scheme.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice.
