Devlin calls for Gift Exemption to be increased for children

Fianna Fáil TD for Dún Laoghaire, Cormac Devlin, has called for an increase in the Small Gift Exemption under Capital Acquisitions Tax (CAT), saying the current limit no longer reflects the financial pressures faced by families.

The exemption allows an individual to receive up to €3,000 a year from any one person without paying tax.

While the measure has been in place for years, the threshold has not been updated despite sharp rises in housing, education and living costs.

Deputy Devlin is now proposing that the limit be raised from €3,000 to €5,000.

“The current threshold has been left unchanged for far too long. Living costs have soared in recent years, yet the rules around financial support from parents and relatives have not kept pace,” he said.

He argued that the change would allow families to provide more meaningful support to younger people without being penalised by tax.

“For example, a young person could receive €5,000 from each parent, €10,000 in total, without it affecting their lifetime tax-free thresholds or triggering a CAT liability.

“That kind of support could make a real difference towards covering college fees, putting money aside for a deposit, or simply easing day-to-day pressures,” he said.

Deputy Devlin added that the proposal was about fairness and practicality.

“Families want to help their children, but the tax system should not be a barrier.

“Increasing the Small Gift Exemption is a sensible way to allow parents and relatives to provide support that genuinely matches the financial challenges young people face in modern Ireland,” he said.

The Small Gift Exemption is part of the Capital Acquisitions Tax system, which applies to gifts and inheritances above certain thresholds.