Skellinton
Registered User
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- 9
Would welcome any advice regarding a potentially serious tax issue, my dad may have! I know I will need to engage professional help so for the moment I'm just trying to get some idea of the extent of the issue.
He's 84 years old, not in the best of health physically or mentally and has never been the most organised person. Anyway, I've been helping him recently with a banking problem and this has uncovered what I think could be a serious tax problem.
He retired at 65 from one of the semi-states with a decent pension - more than enough to bring him into the higher PAYE bracket. When going through his bank statements I noticed that he was getting two other regular payments. When I asked him about these he said that one was the Irish state pension and the other was a small pension from the UK for my mother (who died 16 years ago at age 59 so not sure why he would be getting this) or a UK pension of his own - he can't remember which, he worked in the UK in the 1950s and 60s so it could be that.
He's getting approx €257 per week Irish state pension and £150 per month from the UK - but as far as I can tell he has not been paying any tax on them.
From my understanding, the entire amount should be liable to tax, USC, etc at the highest rate. Ignoring the UK amount, for now, if the Irish state pension is roughly €12k per annum then he should have been paying about €6k a year in tax. Multiply that by 19 years since he retired, add in penalties and interest and you could be talking the guts of €200k.
He's known that this has been looming for some years but has just ignored the problem, told no one, and now it's playing on his mind a lot and he says he wants to deal with it.
He owns his own home (worth about €350k) and has savings of about €70k. He has three children and his will, I am the executor, divides the estate equally between the three of us.
I've told him he has two choices - the easy one is to ignore the problem and let the estate deal with it when he's gone. Obviously, all that does is create a bigger issue down the line.
The right choice, the hard one, would be to deal with it now - engage a tax accountant, get in touch with Revenue to stop the clock so to speak and then to negotiate a payment strategy. He's terrified they would insist on full payment rather than instalments or that they would force him to sell the house.
I know he would like to do the right thing but I also know that if he's looking at a tax bill of 10's of thousands then he will kick it down the road.
Any advice would be really appreciated.
He's 84 years old, not in the best of health physically or mentally and has never been the most organised person. Anyway, I've been helping him recently with a banking problem and this has uncovered what I think could be a serious tax problem.
He retired at 65 from one of the semi-states with a decent pension - more than enough to bring him into the higher PAYE bracket. When going through his bank statements I noticed that he was getting two other regular payments. When I asked him about these he said that one was the Irish state pension and the other was a small pension from the UK for my mother (who died 16 years ago at age 59 so not sure why he would be getting this) or a UK pension of his own - he can't remember which, he worked in the UK in the 1950s and 60s so it could be that.
He's getting approx €257 per week Irish state pension and £150 per month from the UK - but as far as I can tell he has not been paying any tax on them.
From my understanding, the entire amount should be liable to tax, USC, etc at the highest rate. Ignoring the UK amount, for now, if the Irish state pension is roughly €12k per annum then he should have been paying about €6k a year in tax. Multiply that by 19 years since he retired, add in penalties and interest and you could be talking the guts of €200k.
He's known that this has been looming for some years but has just ignored the problem, told no one, and now it's playing on his mind a lot and he says he wants to deal with it.
He owns his own home (worth about €350k) and has savings of about €70k. He has three children and his will, I am the executor, divides the estate equally between the three of us.
I've told him he has two choices - the easy one is to ignore the problem and let the estate deal with it when he's gone. Obviously, all that does is create a bigger issue down the line.
The right choice, the hard one, would be to deal with it now - engage a tax accountant, get in touch with Revenue to stop the clock so to speak and then to negotiate a payment strategy. He's terrified they would insist on full payment rather than instalments or that they would force him to sell the house.
I know he would like to do the right thing but I also know that if he's looking at a tax bill of 10's of thousands then he will kick it down the road.
Any advice would be really appreciated.
