Tax efficient transfers

D

DublinD

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Parent (67) is considering how/what is the best aspect for future planning for transfer of assets to 2 children should worst case happen. In a broad sense what is the best route to minimise taxes upon death. Parent currently has:

1 house (PPR)
1 ARF
Multiple Bank accounts in sole name (cash)

Value of total exceeds both child's CAT allowance combined so would trigger a CAT liability individually.

Apart from reading about:
Possible insurance policies to cover any CAT liabilities
3k gift allowance each year
Move back to PPR

What options do people have to minimise tax (if any)?

*edited for CAT
 
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It Capital ACquisitons Tax I assume.

How much are the over the threshold if it's small then just deal with it by SGE to wife children etc.

If it's €1m then give them the money on condition that they buy farmland divest their assets and qualify for Ag relief and then in 6 years sell it not CAT.
 
Look carefully at ARF inheritance rules. If I remember correctly it's treated differently and actually subject to income tax at 30% when left to a child, but exempt from inheritance tax.
 
Thanks, will double check the ARF relief to be certain. That would reduce CAT hit of 33% but obviously can't avoid the 30% charge. Still 3% is a saving!! Will calculate where that leaves us for thresholds without ARF being included but could still be over.
 
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john luc said:
open a joint account with children and transfer cash funds into these accounts.
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Genuine question here as I seem to be missing something - how does this make it more tax efficient? Outside of utilising the 3k per annum exemption.
 
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start using the account between yourself and your children transferring funds In and out. over time the account is a joint account.;)
 
john luc said:
I was told before that joint accounts do not become part of probate.
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They don't form part of probate if the account is set up so that the joint owner becomes the sole owner. That's an ownership issue.

But that does not exempt it from tax.

You need to distinguish between tax avoidance and tax evasion.
 
actually as I wrote I realised I was incorrect sorry. I had a family issue where there was a small balance in a joint account and one person died. The balance was transferred to the survivor without any fuss and I was told in was fine to do so. The account was a genuine joint account between the two.
 
Aside from the tax discussion, Joint accounts tend to cause family arguments. It's always best to clarify intention in Will so others don't claim that the joint names was just intended to allow the person to assist with bank transactions.

By the way, most banks will freeze joint accounts over a certain balance until they receive a clearance certificate from Revenue following death of one named holder.
 
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