IT38 filing for inheritance from US?

Z

zuinig

Registered User
Messages
25
My father recently inherited money from his sister in the US and I believe he does not have to file an IT38 return (nor pay any CAT). Is this correct?

The disponer left Ireland 60+ years ago, was a US citizen, and had no assets of any sort in Ireland. All their assets were in the US and the executor has dealt with everything and made distributions. The amount involved is more than the Class B allowance.

I phoned Revenue and was told verbally that we need do nothing. But, for reassurance, I submitted an enquiry through ROS and after a while someone comes back asking for details so as to provide a temporary PPSN for the disponer so that I can file an IT38. However it appears that the US/Ireland tax treaty covers this and that once the disponer and assets are subject to US taxation that no further tax is due in Ireland (https://www.revenue.ie/en/gains-gif...m-against-cat/double-taxation-relief-usa.aspx).

Do I just ignore the ROS enquiry and do nothing?
 
I'm a bit confused by your post.

Did the property/inheritance arise in Ireland or the US? sorry re-read your post now & see that all the assets were in the US

so your father lives in Ireland?
 
Last edited:
Yes, father lives in Ireland.

I'm just going to presume that the tax treaty applies (as I was told by the Revenue helpline) and ignore the ROS request to provide information for filing.
 
IANATE

You / your father would be foolish to ignore Revenue.

Your father needs to make a return for this inheritance; even if the tax is offset by the US tax, you still need to provide all that information.

Get the paperwork from the US executor & file the return.
 
I would have thought it is taxable in Ireland, with credit for the US tax. So maybe a liability or maybe not.
 
zuinig said:
I phoned Revenue and was told verbally that we need do nothing.
Click to expand...

I would agree with what Revenue told you in the call.

Your father is presumably Irish resident for tax purposes.

In the first instance, a charge to Irish CAT arises due to his Irish tax resident status.

However, if the 'situs' of the asset (US Bank Account) is in the US as determined under the Ireland-US double taxation agreement covering inheritance tax in Ireland and Federal Estate Tax in the US, then Ireland cannot tax property outside its territory unless:

- the disponer died domiciled in Ireland (or the disposition is governed by Irish law), or
- the disponer died non domiciled in the US.

Source: Article IV(2) of the Convention https://www.irishstatutebook.ie/eli/1950/act/18/schedule/1/enacted/en/html#sched1

If your aunt had acquired a US domicile which appears likely with limited ties to Ireland after 60+ years, then the inheritance by your Dad is outside the scope of Irish tax as the situs of the property (the US bank account) is based on wherever the disponer is domiciled.

zuinig said:
once the disponer and assets are subject to US taxation that no further tax is due in Ireland
Click to expand...

This point is also key. Where property could escape tax in both jurisdictions, Article III of the Convention has a proviso to prevent this happening.

An IT38 is required to be filed once the taxable value of an inheritance exceeds 80% of the relevant group threshold. There is no taxable value in this scenario and so an IT38 would not be required in my opinion.

That's my reading based on what you have posted but, as always, seek professional advice if you want to settle the matter definitively.
 
zuinig said:
I phoned Revenue and was told verbally that we need do nothing.
Click to expand...
zuinig said:
I'm just going to presume that the tax treaty applies (as I was told by the Revenue helpline) and ignore the ROS request to provide information for filing.
Click to expand...
As mentioned many times here, Revenue contacts can and do give out inaccurate info and in situations like this you really need independent professional advice.
 
AAAContributor said:
I would agree with what Revenue told you in the call.

Your father is presumably Irish resident for tax purposes.

In the first instance, a charge to Irish CAT arises due to his Irish tax resident status.

However, if the 'situs' of the asset (US Bank Account) is in the US as determined under the Ireland-US double taxation agreement covering inheritance tax in Ireland and Federal Estate Tax in the US, then Ireland cannot tax property outside its territory unless:
- the disponer died domiciled in Ireland (or the disposition is governed by Irish law), or
- the disponer died non domiciled in the US.
Source: Article IV(2) of the Convention https://www.irishstatutebook.ie/eli/1950/act/18/schedule/1/enacted/en/html#sched1

If your aunt had acquired a US domicile which appears likely with limited ties to Ireland after 60+ years, then the inheritance by your Dad is outside the scope of Irish tax as the situs of the property (the US bank account) is based on wherever the disponer is domiciled.

This point is also key. Where property could escape tax in both jurisdictions, Article III of the Convention has a proviso to prevent this happening.

An IT38 is required to be filed once the taxable value of an inheritance exceeds 80% of the relevant group threshold. There is no taxable value in this scenario and so an IT38 would not be required in my opinion.

That's my reading based on what you have posted but, as always, seek professional advice if you want to settle the matter definitively.
Click to expand...
Thanks for the detailed reply and for the reassurance.
You understood it all perfectly and you echo what the woman from Revenue told me on the phone.
When I wrote the enquiry on ROS I probably phrased my question wrongly and they just focused on the issue of filing the IT38 first. I will probably reply to them anyway.

It'll be a nice little bonus for my dad who's just moved into a nursing home.
 
You must log in or register to reply here.
Back
Top