Deferral of Inheritance Tax

On a Plain

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I am due to jointly inherit a house from my aunt along with my other cousin. There will be a sizeable inheritance tax bill due on the property however. The issue is my cousin currently resides in the property and has indicated no intention of wanting to sell or leaving the property. But we cannot possibly pay this bill without selling the property. I am worried about being liable for a tax bill I am unable to pay. Will I have to go to the Revenue and explain this or what ?
 

Jayom75

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You could also disclaim the benefit under the will (i.e. refuse the inheritance), and no tax liability arises.
 
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NoRegretsCoyote

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But we cannot possibly pay this bill without selling the property.
You may be able to take out a mortgage to pay the CAT bill.

Otherwise if the tax bill is "sizeable" then so is the house. If you or the cousin don't have income or other assets to pay the tax bill then you both need to think about selling up.
 

Itchy

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I am due to jointly inherit a house from my aunt along with my other cousin. There will be a sizeable inheritance tax bill due on the property however. The issue is my cousin currently resides in the property and has indicated no intention of wanting to sell or leaving the property. But we cannot possibly pay this bill without selling the property. I am worried about being liable for a tax bill I am unable to pay. Will I have to go to the Revenue and explain this or what ?

How are they planning to pay their tax bill?
 

jpd

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Write to the executor.

But you can not determine the destination of the share you disclaimed. This will fall into the residue of the estate and be dealt with according to the terms of the will. If the will is badly drawn up and there is no residue clause, then it will be divided according to the intestate rules. This may not be what you want but you have no say in the matter once you disclaim your share. You may have to disclaim again, of course, if you are entitled to a share of the residue under intestate rules
 

On a Plain

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They may be exempted under the dwelling house exemption?

Yed I believe they are exempt under that. That doesnt help me though !
I dont want to disclaim as there should be a decent amount left over even after tax.
The executor is another uncle, but he is very ill at the moment
 

Itchy

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Under the dwelling house exemption the house can be sold and the beneficiary can reinvest (all) those funds in a property and not lose their tax benefit.
 

On a Plain

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Maybe I am catastrophising here , but what would happen if he dug his heels in about selling and was able to come up with the funds for his tax bill ?
 

NoRegretsCoyote

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Maybe I am catastrophising here , but what would happen if he dug his heels in about selling and was able to come up with the funds for his tax bill ?
You could take legal action to force him to sell or buy you out.

This could be costly though.


I don't know how Revenue would respond if you declared the inheritance but claimed inability to pay CAT due to co-owner's reluctance to sell. It can't be uncommon. Around 20,000 houses are bequeathed every year in Ireland.
 

On a Plain

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You could take legal action to force him to sell or buy you out.

This could be costly though.
Had a very casual conversation with him about it a few weeks ago. His view is that as this is his family home (even though he doesnt actually own it), he cant be forced to leave, and to quote "what are they going to do, come and physically drag me out? .... that doesnt happen in Ireland"
 

jpd

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You will have a lot of bother trying to pay your tax - that doesn't worry him?
 

Thirsty

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It's not clear from your post exactly where in this process you are?

Has your Aunt already passed away? Or is she living?

If she has already passed (and my condolences); has probate been applied for / granted?

Do you have a copy of the will?

My understanding is that inheritance tax only becomes due when you become the beneficial owner / recipient of the property.

It's not 100% clear from your post if the current occupant of the property is also a beneficiary?

Revenue will allow you to spread out inheritance tax payments, though they charge interest.
 

On a Plain

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It's not clear from your post exactly where in this process you are?

Has your Aunt already passed away? Or is she living?

If she has already passed (and my condolences); has probate been applied for / granted?

Do you have a copy of the will?

My understanding is that inheritance tax only becomes due when you become the beneficial owner / recipient of the property.

It's not 100% clear from your post if the current occupant of the property is also a beneficiary?

Revenue will allow you to spread out inheritance tax payments, though they charge interest.
My aunt passed away about 6 months ago. Probate was applied for and granted a couple months later. Unfortunantley my uncle, who is the executor, is very ill and unable to complete the admin of the estate at the moment. But since the probate was granted my cousin, who is the only other beneficiary and lives in the house, has been making some noises about not selling as I have described above. My ultimate worry is that if he digs his heels in he cant be forced out, and there is no way to make him sell or buy me out
 

kinnjohn

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I think There was a case like yours on Askaboutmoney some time ago if you put in a few keywords search section you might find the post,:)
 
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Thirsty

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Ok so grant of probate is completed. That means you can get a copy of the will without bothering your Uncle since he's not well. You'll find the details on how to do that easily enough online.

The reason it's a good idea to get a copy of the will is to check exactly what it says.

If the will directs that the property be sold then that is what has to happen. Cousin can try and act the maggot, but ultimately he will get his walking papers.

If the property is left to you in equal shares, then its a wee bit trickier.

But people often make noise & don't follow through when you stand up to them. Speak softly & carry a big stick.

Since the exec is so unwell, it is possible for an administrator to take his place; there is a process for that, but it depends if you think Uncle will recover / improve or not?
 

Sue Ellen

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I am due to jointly inherit a house from my aunt along with my other cousin. There will be a sizeable inheritance tax bill due on the property however. The issue is my cousin currently resides in the property and has indicated no intention of wanting to sell or leaving the property. But we cannot possibly pay this bill without selling the property. I am worried about being liable for a tax bill I am unable to pay. Will I have to go to the Revenue and explain this or what ?


You seem to be unfortunate ESPECIALLY when it comes to inheriting houses.

How did the case go with your brother and the house you were both inheriting from your uncle and because of which you had engaged a solicitor back in February, 2020?
 
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