The Kindness of Strangers Is Taxable
From: Dermot Halligan
To: Aoife Nwosu, Chartered Accountant
Subject: quick question
Aoife — quick one. Someone has given me a boat. Do I need to do anything?
From: Aoife Nwosu
Hello Dermot. I am going to need a little more than that.
From: Dermot Halligan
Fair. A man has given me a boat. He is not a relative. It is not a business thing. He just gave it to me.
From: Aoife Nwosu
Right. Some questions.
1. What is the boat worth?
2. Why has he given you a boat?
3. Have you accepted the boat?
4. Where is the boat currently?
From: Dermot Halligan
1. No idea. It's about twenty-two feet.
2. This is the difficult bit.
3. It's in my drive so I think yes.
4. See 3.
From: Aoife Nwosu
Please expand on 2.
From: Dermot Halligan
In 2019 I stopped on the Ballintra road because there was a car in the ditch. I got the fella out and waited with him for the ambulance. That's it. That's the whole thing. I gave a statement to the guards and went home and I have not thought about it since.
Last Tuesday a man I did not recognise knocked on my door with a boat on a trailer.
From: Aoife Nwosu
Is he the man from the ditch?
From: Dermot Halligan
He is the man from the ditch.
From: Aoife Nwosu
Right.
I am going to be straight with you, Dermot: this is more interesting than anything else on my desk today and I am going to enjoy it more than I should. Bear with me while I do it properly.
From: Aoife Nwosu (later)
Position as I understand it.
Gifts. A gift from a stranger is a gift. There is no income tax on receiving a gift in these circumstances — you have not provided a service, you have not invoiced anybody, and there is no employment or trade here.
Capital acquisitions tax. This is where it gets real. Gifts above a threshold are taxable and the threshold for a stranger is the lowest one. It is currently €16,250 across your lifetime from all Group C sources.
So: what is the boat worth?
From: Dermot Halligan
I got a fella to look at it. He says between nine and twelve thousand.
From: Aoife Nwosu
Then you are under the threshold and there is nothing to pay, assuming no other Group C gifts, which I would know about, and there are none.
You do not need to do anything.
From: Dermot Halligan
Great. Thanks Aoife.
From: Dermot Halligan (four minutes later)
What if I don't want a boat?
From: Aoife Nwosu
Dermot.
From: Dermot Halligan
I don't want a boat! I live eleven miles from water! I have never been in a boat! The man has three children and I looked it up and that boat is worth more than his car!
From: Aoife Nwosu
Have you said any of this to him?
From: Dermot Halligan
I said "ah now" about six times.
From: Aoife Nwosu
I want to say something and then I will go back to being your accountant.
You cannot give it back. I have seen this before — not with a boat, but with a caravan and, once, with a horse. The man has spent six years working out what he owed you and this is the number he arrived at, and if you hand it back you are telling him the number was wrong.
The correct move is to accept the boat and be visibly delighted about it.
From: Dermot Halligan
I'm not delighted.
From: Aoife Nwosu
Then act, Dermot.
From: Dermot Halligan (three weeks later)
Update. I have been out in the boat twice. It is fine. He came both times. He knows what he's at and I do not, so I have to be told everything, which he enjoys enormously.
Going again Saturday.
Do I need to declare the diesel?
From: Aoife Nwosu
No.
Send me a photograph.