New gift tax rules to impact the Bank of Mum and Dad

Policy shift will steer children toward arranging loans from credit institutions, thereby lining the pockets of banks rather than having a system of intergeneration assistance

Under the new rules, set to come into effect later this year, the child will instead be assessed as having received a benefit equal to the amount of interest they otherwise would have had to pay to borrow an equivalent amount of interest.

The rules on gift tax are being augmented in the Finance Bill that is making its way through the Dáil.

The change will herald a key change that affects parents stepping in to assist their children under what has become known as the “Bank of Mum and Dad”.