Inheritance Tax Exemption

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Pugmister

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Hi,

Im hoping someone may be able to clarify a query regarding inheritance tax for assets from parents to children & grandchildren.

My parents have two properties that they will be passing on in their will. I currently live in one of those properties with my partner and daughter and will continue to do so for foreseeable future.

I understand from reading on the revenue website that this property if left to me will be exempt from CAT due to my occupancy for the proceeding 3 years and as long as I don't sell for 5 years after inheriting the asset. I am wondering if my parent s were to leave this property to my daughter (their grand daughter) rather than me, does this rule still apply with it being her family home ?

That would then leave me in a position to inherit the second property and still have my 225k relief to use against the value of the property.

Both properties exceed the 225k so Ideally we want to limit tax exposure as much as possible.
 
An interesting question.

However, a moot one. If you take the property you guys are living in and don't sell it for SIX years, you'll get the exemption and still be free to take the other property and use your €225k threshold for that.
 
Many thanks GG.

So the house I currently live in is deemed my family home and completely exempt from CAT as long as I meet the 3 & 6 year requirements.

The below bit on the revenue website has me confused and is what led me to believe I could not avail of both the exemption and relief.

  1. The recipient must not, at the date of the gift/inheritance, be beneficially entitled to any other dwelling- house or to any interest in any other dwelling- house. The Revenue's view is that a dwelling-house means a building or part of a building being used or which is suitable for use as a dwelling.
This is why the idea of my daughter inheriting our current house sprung to mind. I must also add my daughter is currently 2 years old so I believe this would have to be held in trust until 18.
 
Pugmister, my question, dwelling house relief,
http://www.askaboutmoney.com/posts/1434172/ and the helpful answers may clarify the position for you. It seems that you cannot claim dwelling house relief and inherit a second house at the same time but you can be bequeathed the house your are living in and the proceeds of sale of the second house.
 
Thanks Valerie, yes I thought availing of one relief / exemption would cancel out the other.

This is why I am wondering if the dwelling relief would apply to a grandchild if that house was her family home in the long term. I know grand children fall under Section B so exemption limits are far lower but I can find no mention in terms of the grand child's family home.

In all honesty selling the house is not something we would want to do. The house is in D6 and has room for two additional properties on the land.
 
Could you explain a little further GG ? I cannot get my head around how this would be possible
 
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