Inheritance Tax

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trojan

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Arising from recent media comment does the threshold of 225k euro apply to each beneficiary and i assume the reference to a "child" in most websites means an adult also who was a child of the owners of the property. Does this mean in say a family of 3 where 2 of the children have died and the property is valued a say 500 k a tax of 91k would arise. I assume the property cannot be registered in the beneficiaries name until the tax has been paid.
 
Yes the reference to child includes adult children.

A gift of €500,000 would result in a CAT liability of approx €89,000 if gifted from both parents to a child. (€225,000 plus €3,000 x 2) Remember that minor children of a deceased child are also class A.

Dwelling House Relief is available in certain circumstances.

The property can be registered in the child's name without the tax being paid. It's a self assessment tax.
 
Every body is entitled to €3000 per any given calender year so if a child is to inherit from a parent they have a once in their lifetime allowance of €225 K and also the €3000 calender year allowance for that year. The balance is taxed at 33% so your example of €500 K property means you deduct €225 K and then €3 K leaving a taxable balance of €272 K @ 33% is €89,760.
 
john luc said:
Every body is entitled to €3000 per any given calender year so if a child is to inherit from a parent they have a once in their lifetime allowance of €225 K and also the €3000 calender year allowance for that year. The balance is taxed at 33% so your example of €500 K property means you deduct €225 K and then €3 K leaving a taxable balance of €272 K @ 33% is €89,760.
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Thanks. I wonder do parents with only one child realise the tax implications for their child when they pass away?
 
Personally I think it's an egregious tax. At the very least the family home should be exempt from Inheritance Tax.

The family home has already been taxed via VAT, Stamp Duty, Property Tax. It is (generally) purchased via mortgage on which interest is paid, with a deposit from savings which was taxed on interest earned, monthly payments made from income on which tax was paid, life assurance on which levies were paid, Solicitors fees on which more VAT was paid.

Everyone has to live somewhere and to be penalised at the end of your life, for being prudent, saving a deposit, paying your mortgage, housing your family is just an outrage in my view.
 
So if you buy a house for €20,000 40 years ago live in it and it's now worth €500,000 there is no CGT and no CAT in certain circumstances can't get much better than that.
 
there is no CGT and no CAT
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... you've already paid several types of tax on the asset as well as interest from income that's already been taxed. Everyone has to live somewhere; we are being penalised for being prudent.
 
We are one of the highest inheritance tax paying countries in the world now as a result of government slashing allowances since 2009.
 
In certain cases the law is very good and understanding, i.e. the inheriting person lives in the house is entitled to inherit. In other cases the law can be unfair.
I am aware of at least two cases where the families were stung for CAT in recent years even though the actual inherited amount was much less than the the threshold per child. In both cases the families delayed selling because of not wanting to immediately offload the family home for physiological reasons. In the intervening year property prices recovered somewhat and the balance from date of death to the selling date was automatically subject to CAT BEFORE the distribution. In those cases the house was not worth 500K or anything like it and with several children as beneficiaries the amounts inherited were not exorbitant approx 40 - 50K each. A better system would be no CAT under the ceiling of inheritance provided the assets are distributed with x number of years of the death.
 
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