Probate SA2 Form / IT38

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weston68

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When does a beneficiary have to return an IT38 and pay the CAT due?
(1) Once the SA2 is submitted to Revenue and Revenue send the beneficiary the IT38?
(2) Once the Probate is granted?
(3) Once the beneficiary receives the inheritance?
 
From memory its payable by 31st october following transfer.

So if you get your timing right & do probate / property transfer in November, you have almost a year to pull together the tax due.

I'm assuming here its actual property we are talking about.
 
Thanks for that reply. I was hoping it was "following transfer" as it would be a bit unfair to have to pay taxes before receipt of the benefit.
 
weston68 said:
Thanks for that reply. I was hoping it was "following transfer" as it would be a bit unfair to have to pay taxes before receipt of the benefit.
Click to expand...
The date the CAT is payable is determined by the date of issue of the Grant of Representation from the Probate Office and NOT the date the property is transferred. If the Grant issued before 31st August the CAT is payable by 31st October the same year. However if the Grant issued after the 31st August the CAT is not payable until the 31st October the following year. There is information on the Valuation date on www.revenue.ie
 
Thanks for the reply Curlywurly.
I checked earlier on www.revenue.ie for reference to Valuation Date. It says that the "valuation date determines the date by which a return must be filed and tax must be paid. The valuation date for an inheritance is the earliest of the following dates:
  • the date the executor or administrator is entitled to retain the asset for your benefit
  • the date on which the asset is retained, or
  • the date the executor or administrator gives the asset to you".
So I'm still hoping that option three applies in the case of, lets say, the inheritance of a house from a parent.
The sequence would be:
Get the Notice of Acknowledgement from Revenue​
Get the Grant of Representation from the Probate Office (which can take months due to backlogs)​
Transfer the title of the house from the deceased to the beneficiary​
At the point of transfer, the tax liability arises​
​
Otherwise the beneficiary would have to pay the tax liability out of their own funds before they take possession of the house. What if they needed to sell the house to cover the liability?
 
So for shares being inherited, probate would have value of the shares per stock exchange at time of death.
Valuation date is presumably the date of the sale?
What would be the "fair" date for valuation if an estate was being divided equally between 2 and one wanted to inherit a house? ie house worth about 500k, shares worth about 1m. One gets house plus some shares.
 
weston68 said:
Thanks for the reply Curlywurly.
I checked earlier on www.revenue.ie for reference to Valuation Date. It says that the "valuation date determines the date by which a return must be filed and tax must be paid. The valuation date for an inheritance is the earliest of the following dates:
  • the date the executor or administrator is entitled to retain the asset for your benefit
  • the date on which the asset is retained, or
  • the date the executor or administrator gives the asset to you".
So I'm still hoping that option three applies in the case of, lets say, the inheritance of a house from a parent.
The sequence would be:
Get the Notice of Acknowledgement from Revenue​
Get the Grant of Representation from the Probate Office (which can take months due to backlogs)​
Transfer the title of the house from the deceased to the beneficiary​
At the point of transfer, the tax liability arises​
​
Otherwise the beneficiary would have to pay the tax liability out of their own funds before they take possession of the house. What if they needed to sell the house to cover the liability?
Click to expand...

I think Revenue deem the date the Grant issues from the Probate Office to be the Valuation date in your situation. However there may be allowances made if the asset has to be sold in order to pay the CAT. Your best bet would be to contact Revenue by phone or email ( there is a facility on ROS for queries) to get a definitive reply so that you do not end up owing interest due to late filing of IT38 or late payment of CAT. Email would be preferable as you will then get a reply in writing. Set out the situation as you have done here and they will advise you correctly. I have found them very helpful in the past.
 
weston68 said:
Thanks for the reply Curlywurly.
I checked earlier on www.revenue.ie for reference to Valuation Date. It says that the "valuation date determines the date by which a return must be filed and tax must be paid. The valuation date for an inheritance is the earliest of the following dates:
  • the date the executor or administrator is entitled to retain the asset for your benefit
  • the date on which the asset is retained, or
  • the date the executor or administrator gives the asset to you".
So I'm still hoping that option three applies in the case of, lets say, the inheritance of a house from a parent.
The sequence would be:
Get the Notice of Acknowledgement from Revenue​
Get the Grant of Representation from the Probate Office (which can take months due to backlogs)​
Transfer the title of the house from the deceased to the beneficiary​
At the point of transfer, the tax liability arises​
​
Otherwise the beneficiary would have to pay the tax liability out of their own funds before they take possession of the house. What if they needed to sell the house to cover the liability?
Click to expand...

Sorry meant to say the earlier you contact Revenue the better. In general they do not make allowances/ agreements to alter the rules AFTER the due date for CAT when the penalties have already occurred.
 
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