Paying inheritance tax on life policy willed to me by brother

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RowanTree

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As part of the assets willed to me by my single brother who passed away last June was two life policies , one worth over 350k, now revenue have taken @150 k in tax from this policy . My accountant seemed to be unaware of this action until it went through. Is this correct ? How can revenue take so much money?
Thanks in advance
 
Sibling to sibling inheritances are classified as Group B for inheritance tax purposes. You would have been entitled to a tax free amount of €30,150 on your inheritance. The balance would have been subject to tax at 33%. 33% of €350,000 however is €115,500 and not €150,000. Have you had correspondence from Revenue re this. How would your accountant not know about these taxes and your liability for them, it seems a bit odd to me.
 
emeralds said:
Sibling to sibling inheritances are classified as Group B for inheritance tax purposes. You would have been entitled to a tax free amount of €30,150 on your inheritance. The balance would have been subject to tax at 33%. 33% of €350,000 however is €115,500 and not €150,000. Have you had correspondence from Revenue re this. How would your accountant not know about these taxes and your liability for them, it seems a bit odd to me.
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I take it from your post that he left you more than just the 350k policy. You would have used up your tax free amount already on this (assuming it was over €30,150), so you will be taxed 33% of the full 350k amount, which is €115,500
 
Hi
I have got more information from the solicitor in regards to the life policy, they charged 41% tax plus universal social charge. Is this correct? Why are these taxes on a life policy and not the Category B sibling to sibling inheritance tax where by the first 30,000 is tax free and there after 33% tax on the outstanding amount?

In reply to the question on life insurance on the mortgage. BoI gave my brother the mortgage. They would not grant life insurance as he was a health risk.
He wanted a mortgage for tax puposes I think. BoI didn't need the life insurance requirement as he had money in other deposit accounts that would have covered the mortgage if required.
 
RowanTree said:
Hi
I have got more information from the solicitor in regards to the life policy, they charged 41% tax plus universal social charge. Is this correct? Why are these taxes on a life policy and not the Category B sibling to sibling inheritance tax where by the first 30,000 is tax free and there after 33% tax on the outstanding amount?
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What does your accountant say? A quick google would indicate that you have paid an Exit tax of 41% on the proceeds of the life policy.
 
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RowanTree said:
In reply to the question on life insurance on the mortgage. BoI gave my brother the mortgage. They would not grant life insurance as he was a health risk.
BoI didn't need the life insurance requirement as he had money in other deposit accounts that would have covered the mortgage if required.
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Well which is it, he coudln't get life insurance because of the health risk and the bank therefore waived the need for it or the bank waived the requirement because he was cash rich?

If it's the former, he could have offered them the life policy he already had.

You have an accountant and solicitor working on this, have they not answered all your questions on tax? It's worrying that your accountant doesn't seem to know what is going on. Are you sure about this? Who filled out the Revenue affidavid?
 
Hi Rowan Tree

Your accountant and solicitor should be able to explain these to you.

I think what has happened here is that the life policy is a savings policy which was subject to exit tax on the profits. However, 150k is 43% of €350k so that seems too high.

Revenue doesn't "take" Capital Acquisition Tax (Inheritance Tax) at source. So the Life Company must have deducted it. They should have issued you with a statement showing the calculations.

Brendan
 
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