Q. We gave our daughter the maximum allowable gift four years ago of €335,000 to enable her to buy a property in Dublin. What we did not know, however, was that once the limit is reached the beneficiary cannot avail of any increase to that limit. So, she is stuck at €335,000 for life, even though the limit has been increased to €400,000 and may rise again. This seems very unfair to me. Is there anything we can do?For this reader’s daughter, there is good news. She is not stuck at €335,000. An increase in the parent-to-child tax-free threshold to €400,000 since their original gift means her parents can now give her the balance up to this amount, tax-free. Beneficiaries of gifts and inheritances fall into different groups for capital acquisitions tax (CAT) purposes, depending on their relationship to the giver. Children fall into Group A and currently can receive a gift or inheritance from parents of up to €400,000, paying tax of 33 per cent on amounts above that.It’s likely this reader’s daughter received her gift between October 9th, 2019 and October 1st, 2024, when the maximum tax-free gift from a parent to a child was exactly €335,000. This threshold rose to €400,000 from October 2nd, 2024. “Very simply, if she was gifted €335,000 back then, her parents would be able to give her the difference now of another €65,000,” says Helen Ferguson, solicitor and partner in the private client department at Mason Hayes & Curran.The news isn’t so good for those gifted amounts above the tax-free threshold at the time. For example, the tax-free threshold for children in late 2012, after the economic crash, had fallen to €225,000.“If a child got a gift of €395,000 back then, and paid tax on the amount above €225,000, they don’t get the tax benefit of the difference between that €225,000 and the current €400,000 threshold,” says Ferguson. [ Can I write my will in such a way to delay any tax bill until after my house sells?Opens in new window ]In this example, if they were to get another gift today, they would declare a previous gift of €395,000 and be able to avail of a remaining tax-free threshold of €5,000.“They can’t then come along and say, well, can I revisit that now that the threshold is €400,000 and get my tax back. It doesn’t work like that,” she says. The tax on the gift is assessed based on the thresholds that are in place at the date of the gift and any tax due has to be paid then.Similarly, back in 2008/09, the tax-free threshold for parents giving to children was over €500,000. If a child was given €500,000 then, and they are in line for a further gift now, they would have to declare the prior gift.“That [previous gift] doesn’t now become taxable for exceeding the new threshold. But you will pay 33 per cent tax on the full amount of the new gift you are getting,” says Ferguson. So, a child gifted €500,000 by a parent back in 2008 who receives a further €200,000 today would have a tax bill of €66,000.“What Revenue is looking for is a declaration of prior gifts. If the prior gifts exceed the current allowable threshold, then you have no allowable threshold left, so you would pay tax on the full amount of the new gift,” says Ferguson.If the amount gifted in the past was less than today’s threshold, the recipient can use the difference between the value of that gift and today’s threshold. So, in the case of the reader’s daughter, she can receive a further gift now of €65,000, on top of the €335,000 already received, before CAT of 33 per cent kicks in on amounts above €400,000. “Once she is within the threshold as of today, including what she got in the past and what she is getting now, she won’t have to pay tax,” says Ferguson.The parents can also avail of the small gift exemption on both dates, says Ferguson. This allows anyone to give up to €3,000 to anyone else, once a year, tax-free. “She received €335,000 previously – the first €3,000 of that is considered exempt in respect of each parent, assuming it was a joint gift, so in terms of declaring the previous amount, it would reduce it by a total of €6,000, to €329,000,” says Ferguson.Considering today’s threshold of €400,000, less the €329,000 she has received, that leaves a tax-free balance of €71,000 remaining. Her parents can gift her another €3,000 tax-free this year, bringing the tax-free amount she can receive from them to €74,000 if one parent makes the gift, or €77,000 if both parents make the gift, says Ferguson. They can also each continue to give her €3,000 a year, tax-free, thereafter. “If the daughter has a spouse or children, both parents can give €3,000 a year tax-free to each of them too, and that can add up quite nicely,” says Ferguson.The name of the reader who submitted the question is not being published to protect the identities of those involved.Please send your legal queries to Joanne Hunt, Ask the Lawyer, The Irish Times, 24-28 Tara Street Dublin 2, or by email to joanne.hunt@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice.