Will and Tax

J

Joe Rock

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There were two in my fathers family. My Dad with 6 children, (I am the eldest), and my uncle with no children and un married.
My Father and Mother are long dead, uncle made a will as follows:Leaving me the house and the land to divide it as I see fit, NOT naming Names. It is valued at approx €2,000,000
I wish to divide it amoung the 6 of us. (OK I did a little work on the land and may claim a little more than the others)
My Question is:-
1...What Tax will apply by me giving my brothers and sister this money?.
2...The fact they were not named in the will does it cause Tax problems?.
3...What Tax will apply to me as my name appeared in the will?
Joe Rock
 
Hi Joe - I can't really help with your questions but I hope other posters will help you. However - just one note of caution. Given the substantial size of the estate, you really need to get professional advise on this one. Engage a qualified tax professional with a good reputation and get written advice, regardless of what information you get on these boards.
 
Taking what you say at face value, if you are entitled to divide the property as you see fit, including taking it all yourself if you wish, then it sounds to me that if you give anything to your siblings that it is likely to be seen as a full inheritance by you and then a gift from you to your siblings. But as Rainyday says this one is not simple, and the precise wording of the will will be very important so its one for your solicitor.
 
This is a relatively complex area, despite appearing relatively simple. A few quick pointers:

1. It is arguable (and as Vanilla says, will certainly depend on the wording of the will) that your uncle created a discretionary trust. If so, you are free to distribute it to your siblings without a "double whammy" of gift\inheritance tax BUT you may incur Discretionary Trust Tax.

2. There may be scope for sensible use of disclaimers so as to achieve the desired result.

3. Is this farmland? Bear in mind that you or some of your siblings might qualify for agricultural relief.

To be perfectly honest, you need to get good tax advice. I cannot undertake this for you, but your own solicitor should either be able to give this advice or to source it.
 
Thank you all so far for the replys. Let me say at this stage I do not know the exact wording of the Will. The Will is made and my uncle is in a nursing home and his memory is gone. I was told that this is the type of Will he made and I just want to get things clear in my mind for when the day comes. As you know they will all want to know what I am going to do as soon as the Will is read.
He was a person who could not make up his mind, so he wants somebody else to decide where things should go. I have no problem with it but I want to know the type of taxes that have to be paid. I will be getting the correct advice after the Will is read, but want to be able to make the correct decisions myself.
Just a few questions:
1..Will I have to pay "Inheritance Tax"?
2..What is "Discretionary Tax" as the last reply spoke about?
Thanking you
Joe Rock
 
If this link doesn't work, try OASIS+Government yourself.



If you are the sole beneficiary, everything over ~50,000 euro, is taxed at 20% and the same again from each of your siblings when your gift to them exceeds that threshold. That's the law. The legal posters recommend expert tax advice so don't delay. You deserve congratulations for your generosity. If you find a way to reduce the tax burden, perhaps you would post it here.
 
Joe, a will only speaks from death and is a private document which no one is entitled to view until after the death. I don't know who told you 'the type' of will your uncle made but there is little you can do to prepare now- tax changes all the time, the reliefs and credits that apply now may not apply at the date of death of your uncle. Indeed you don't even know for sure what is in the will. For all you know, your uncle may have decided to leave his estate to the cats home- any thing else is just speculation. Plus if your uncle has a lucid moment he may even change his existing will. To be able to advise you as to the tax applicable, we would need to know the exact wording of the will, the nature of your relationship with him, whether there is a possibility of favourite nephew relief, agricultural relief, dependant relative etc etc. Only a tax adviser who is aware of all the facts, the assets, the relationships, the wording of the will and so on could advise you properly.
 
Can the beneficiary(s) of a will not agree to have it altered so that their share is distributed to someone else? I think that my brother had his share of his inheritance from my parent's estate given directly to his children. This was in the UK though.
 
Sorry, I didnt see this until now. I think what you are referring to is a disclaimer- in that a beneficiary does not have to take what they are given in the will, but can disclaim it. However this has other implications, depending on the wording of the will. Also beneficiaries can enter into a deed of family arrangement if they all agree and divide the property as they see fit, however the tax implications of the original will cannot be avoided by doing so. I would reiterate that in this case detailed legal and tax advice will be needed, and realistically this would be after your uncles death.
 
But the advice may be more use now if it would be beneficial (and possible) to have the will altered?
 
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