Life insurance payout from Spain

O

Ocaoilr2

New Member
Messages
5
Hi all,

I'm a tax resident in Ireland and have received a life insurance payout from a Spanish Grandmother. The solicitor n Spain seems to think that we do not need to pay tax as tax has been paid in Spain (it was very little-under €1,000)

From my research I think that the first €32,500 is tax free and I will pay 33% on the rest.

I also found some examples where you can buy a specific type of life insurance policy, to provide a tax-free lump sum to cover any inheritance tax liabilities that your beneficiaries may have when you die. Again, not sure this would apply as I'm a resident in Ireland and it was paid out in Spain.

Can anybody give me any guidance on what to do?
 
This is more in the case of where children will face a large tax bill. The parents can take out a policy to pay the tax bill and the payout is not taxable as it's being used to pay a tax. I don't think it's relevant to you.

Otherwise it's not clear to me. Was the tax paid under €1,000 or the life insurance payout itself?
 
Hi thanks for reply, the payout itself was 6 figures. The tax paid was €700 or €800 I think.
 
RedOnion said:
How many years have you been resident in Ireland?
Click to expand...
4 years exactly. I should also say there were two life insurance policies with an even payout on each. She was finance savvy so maybe she did it thinking I wouldn't have to pay tax. I was resident in Netherlands before here so maybe their inheritance laws are different to here and tax is not paid on life insurance. I'm just thinking out loud here! There must be a reason for such large policies!
 
Ocaoilr2 said:
4 years exactly.
Click to expand...
Are you Irish domiciled?
If not, any foreign inheritance in the first 5 years of residence in Ireland are not subject to Irish inheritance tax. There might be more technicalities around it, so get advice.
 
RedOnion said:
Are you Irish domiciled?
If not, any foreign inheritance in the first 5 years of residence in Ireland are not subject to Irish inheritance tax. There might be more technicalities around it, so get advice.
Click to expand...
Yes, I'm Irish domiciled. Where would You recommend I get advice? From a Spanish tax consultant, Irish tax comsulatant or some sort of international tax company.
 
Probably pick a large tax consultancy firm that has a grasp of Irish and European tax related law, they should have the in-house expertise.
 
You must log in or register to reply here.
Menu
Log in
Register