The €3,000 Small Gift Exemption: Using It to Pass €30,000 to a Child Tax-Free Over Time

In Ireland you can receive up to €3,000 from any one person in a calendar year completely free of Capital Acquisitions Tax (CAT) — and it doesn't touch your lifetime group threshold or need to be reported. Because two parents are two separate disponers, they can hand a child €6,000 every year, which over a decade quietly moves €60,000 sideways without using a cent of the €400,000 Group A threshold.

The small gift exemption is the most overlooked tool in Irish estate planning. People obsess over the headline thresholds — and rightly so — but the exemption that does the heaviest lifting over a lifetime is the small, boring one you never have to declare. This guide walks through exactly how it works, two fully worked examples with real figures, and the handful of traps that quietly disqualify gifts people assume are covered.

The rule, stated precisely

Revenue's wording is unusually clean: "Gifts you receive up to the value of €3,000 from any person in a calendar year are exempt from Capital Acquisitions Tax (CAT)." Three details inside that sentence do all the work, and getting any one of them wrong is where mistakes happen.

• €3,000 — per disponer. The €3,000 is measured against each person who gives (the "disponer"), not against you as a whole. Ten different people could each give you €3,000 in the same year and every cent is exempt.
• Per beneficiary. The same giver can use a separate €3,000 for each different person they gift. A grandparent can give €3,000 to each of four grandchildren in one year — €12,000 out the door, all exempt.
• Per calendar year. The clock is the calendar year (1 January–31 December), not a rolling 12 months. This is the trap that catches people, covered below.

Critically, the exemption applies only to gifts, not to inheritances. You cannot shave €3,000 off an inheritance with it — it is purely a lifetime-giving tool. (Source: Revenue.ie — Small Gift Exemption.)

It does not touch the group threshold — and never appears on an IT38

This is the part that makes the exemption so powerful for long-term planning. A €3,000 gift is not merely "below the radar" — Revenue states that gifts within the small gift exemption are "not taken into account in computing tax and are not included for aggregation purposes."

In plain terms: an exempt €3,000 gift does not chip away at your €400,000 Group A lifetime threshold from a parent, and it does not get added into the running total of prior benefits that you would otherwise aggregate back to 5 December 1991. You never declare it on an IT38 return, and you don't need to file anything to claim it. A CAT return only becomes necessary once the taxable value of benefits you've received under a given group threshold exceeds 80% of that threshold — and small-gift money simply isn't in that calculation.

The mechanics matter because the alternative — a single lump-sum gift — behaves completely differently. The table below shows the same €30,000 delivered two ways.

Neither approach produces a CAT bill on its own at these amounts — the threshold is large. But the drip approach preserves the entire €400,000 for later, when the family home or the bulk of the estate eventually passes. That preserved headroom is the whole point.

Stacking it with the €400,000 Group A threshold

The current thresholds (for gifts and inheritances taken on or after 2 October 2024) are: Group A €400,000 (a child from a parent), Group B €40,000 (e.g. a niece, nephew, sibling, grandchild), and Group C €20,000 (anyone else). Anything above the relevant threshold is taxed at 33%. (Source: Revenue.ie — CAT group thresholds and CAT rates.)

Think of it as two separate buckets that never mix:

• Bucket 1 — the annual small gift exemption. Refills every 1 January. €3,000 per disponer per beneficiary. Use it or lose it.
• Bucket 2 — the lifetime group threshold. €400,000 from parents, cumulative over your whole life. Once it's used, it's gone.

Disciplined families empty Bucket 1 every year so they never have to dip into Bucket 2 for routine help, leaving the full €400,000 available for the inheritance event that actually risks a tax bill.

The pitfalls that quietly disqualify a gift

1. Gifts from a company are not small gifts

The small gift exemption hinges on the disponer being a person. If a gift comes from a company rather than an individual — for example, a family trading company transferring cash to the owner's child — the €3,000 exemption is not available in the normal way, and special rules can treat the beneficiaries of the company (the shareholders) as the disponers. The practical takeaway: gift from your own pocket as an individual, not from a company account, or you can lose the exemption and create an unexpected taxable gift. If a company is involved, get advice before transferring — this is a known area where DIY planning goes wrong.

2. The reset is the calendar year, not 12 months rolling

This catches people who think in anniversaries. The €3,000 allowance is tied strictly to the calendar year. A gift of €3,000 made on 20 December 2026 and a second €3,000 made on 5 January 2027 are two separate years' allowances — both fully exempt — even though they're only 16 days apart. Conversely, two €3,000 gifts both made in 2026 (say March and November) are one year's worth: only the first €3,000 from that disponer is exempt, and the second €3,000 is a taxable gift that aggregates against the threshold.

3. Don't confuse "exempt" with "free to give from anywhere"

The gift must genuinely come from the disponer's own resources. Routing one person's money through another to manufacture extra €3,000 slices (e.g. a parent giving €3,000 to their other child purely so that child re-gifts it on) can be challenged as an artificial arrangement. The exemption rewards genuine, distinct gifts from genuinely distinct people.

Frequently asked questions