LarryScott
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I assume that is due to the 420k allowance? The 33% rate seems pretty high.
Essentially, non-parents are hit hard with parents not having to pay as much (as long as they give to their children).
Changing expectations around inheritance
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Essentially, non-parents are hit hard with parents not having to pay as much (as long as they give to their children).
CAT is, of course, a tax on the heirs, not a tax on the deceased, who is in no way affected by it, on account of being already dead.
Except when it's a gift rather than a bequest?
LarryScott
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I assume that the 0.1% value of GDP for Ireland is CAT?
In any case, CAT is a tax on the transfer of value from one person to another. In terms of tax incidence, it doesn't matter who actually pays the tax.
You give a gift of 100k but the recipient only gets 67k after all taxes are paid.
It matters hugely. To give a gift or inheritance of €100k costs you (or your estate) €100k, regardless of what the CAT rate it. It is the recipient who bears the CAT, and who is affected by the CAT rate.
LarryScott
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These are identical in all effects.
a) You give 67k to someone, and have to pay 33k in tax for it
b) You give 100k to someone, and they have to pay 33k in tax for it
In both cases, the donor pays 100k total, the recipient gets 67k net, and the government gets 33k in tax.
If someone is giving a gift, they are doing it so the recipient gets the gift.
It's like how employer and employee paid income taxes are basically equivalent. Having the employer pay the tax increase is just a way to hide it.
The Irish system seems designed so that most people don't have to pay inheritance tax, limits are quite high and if any significant section of voters come into the net the limits just get pushed higher.
We've the dwelling house exemption which I think is unique in how it operates - allowing anyone meeting criteria to inherit the house tax free not just immediate relatives which is the usual case elsewhere - and probably more importantly and unusually with no cap on the value or size of the dwelling house.
The take from inheritances being low is probably because the CAT rate is high and governments don't have the stomach (or thanks to Corporate Tax - the need) to deal with regular people having to pay it, and the idea of of progressive series of CAT tax rates is clearly beyond them.