http://forums.worldofwarcraft.com/th...d=1&pageNo=1#2

For every two levels a character on the new recruited account gains, they can "grant" a level to one of the veteran player's characters.
The maximum number of grantable levels that can be gained by a single character is 30.
The recruited player can decide to grant all 30 levels at once to a character on a linked account.
The character who is being granted a level has the option to accept or decline the level grant.

Levels can only be granted to the veteran player's account, not vice versa.
Levels can not be granted Cross Faction.
A character on the recruited account cannot grant a level to a character equal or higher than their own level.
http://us.blizzard.com/support/artic...rticleId=25716

Are there are any restrictions on granting levels?

Yes:
Levels may only be granted to characters on a veteran account by characters on a linked recruit account
Levels may only be granted to characters of the same faction and on the same realm
Levels may not be granted to characters over level 59
Levels may not be granted to characters of equal or higher level
Levels may not be granted once a 90-day account link breaks
Levels may not be granted to veteran characters with XP gains disabled.