Inheritance from Canada - Canadian estate tax Vs Irish CAT - any relief? does double taxation apply?

Discussion in 'Wills, inheritances and gifts' started by missusdoyle, 16 Apr 2018.

  1. missusdoyle

    missusdoyle Registered User


    Hoping for either professional view or experience ... thanks in advance for any consideration, comments and advice.

    I am Canadian but resident in Ireland for over 15 years - my mother passed away 2 years ago. Settlement of her estate has taken some time due to triggering of dissolution of family company and disposal of real estate.

    Her estate is now at point of estimating estate taxes and close to completion.

    The question I have is - with Estate Tax in Canada and the CAT that will be triggered for me in Ireland - essentially I am correct in saying this is double tax on same event - allbeit tax in different jurisdiction?

    Does any double taxation relief apply? Specifically I am aware of 3 references on Revenue . ie and

    1. link on Revenue website canada.pdf and the text of Article 21 which i believe may be applicable

    Article 21 - Other Income

    Subject to the provisions of paragraph 2, items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State if the recipient is the beneficial owner thereof. 2. However, if such income is derived by a resident of a Contracting State from sources in the other Contracting State, such income may also be taxed in the State in which it arises, and according to the laws of that State. Where such income is income from an estate or a trust, other than a trust to which contributions were deductible, the tax so charged shall not exceed 15 per cent of the gross amount of the income

    2. Unilateral relief - (can't post link) but on revenue unilateral-relief

    Unilateral relief is relief from double taxation for property in states other than the UK and the USA. It can only apply where there is no double taxation treaty in place between countries. Revenue may allow a credit against CAT payable in Ireland where tax had already been paid in another country on that same property.

    The country which charges tax on the foreign property will grant the credit. The credit granted is the lesser of:

    • the CAT payable on the property situated abroad
    • the foreign tax on the foreign property.
    Credit given cannot be greater than the amount of Irish tax paid on the property.

    3. From the Capital Acquisitions Tax Consolidation Act 2003

    (can't post link)

    Arrangements for relief from double taxation. [CATA 1976 s66]

    section 106 and, if any such arrangement provides for the allowance of the amount of a tax payable in a territory outside the State as a credit against gift tax or inheritance tax, the provisions of the arrangement shall apply in relation to the tax payable in that territory in lieu of the provisions of subsection (2).

    (4) Where the foreign tax in respect of property comprised in a taxable gift or a taxable inheritance taken under a disposition on the happening of an event is, under the terms of the disposition, directed to be paid out of a taxable gift or a taxable inheritance (taken under that disposition on the happening of the same event) other than the taxable gift or taxable inheritance out of which it would be payable in the absence of such a direction, then, for the purposes of subsection (2), the taxable gift or taxable inheritance out of which the foreign tax would be payable in the absence of such a direction, and no other taxable gift or taxable inheritance, is treated as reduced by the payment of the foreign tax.

    Missus Doyle