Inheritance tax

bridget T

My uncle recently died in the uk and left me his house in the will.
I am Irish resident since birth.


As it stands in compliance with Irish tax the first 43400€ of inheritance is exempt the remainder is taxed at 25% from what i understand.

my question is, is there any legal way of minimising the tax due.


thanks

GerardKeating

bridget T wrote: »

My uncle recently died in the uk and left me his house in the will.
I am Irish resident since birth.


As it stands in compliance with Irish tax the first 43400€ of inheritance is exempt the remainder is taxed at 25% from what i understand.

my question is, is there any legal way of minimising the tax due.


thanks

IANAL but, would the tax liablilty not be in the UK, assuming the uncle was resident in the UK.

bridget T

thats what i thought but according to revenue Comm, No.
there would be no tax liab in the uk as the house falls below the tax threshold. but tax is due Ireland.

Carawaystick

bridget T wrote: »

thats what i thought but according to revenue Comm, No.
there would be no tax liab in the uk as the house falls below the tax threshold. but tax is due Ireland.

Did you check the inland revenue site to see if they want their pound of flesh first

you could fudge the date the transfer took place to get a better exchange rate maybe.

Ask the revenue how it's valued.
Figure out the potential tax liability and see if it's worth paying a tax advisor to reduce the bill by more than their fee.

MDS2009

Bridget T the €434,000 threshold you are referring to is in relation to gifts or inheritances from parents to children.

As you are inheriting from an Uncle you are classed as Group B for the purposes of inheritance tax or CAT Capital Acquisitions Tax. This threshold is significantly lower for inheritances from uncles.

You must pay inheritance tax in Ireland as you are resident here irrespective of where the property is located. There are expenses you can offset against the inheritance tax eg legal costs of the estate, auctioneers costs, etc.

The date the revenue will take as the valuation date of the property (ie if your uncle died in 1998 they will take the value of the property at that date and not today's date) is your uncle's date of death as this is deemed to be the date that you inherited the property.

You will have to file what is called an IT38 Form with the Revenue here (you'll find it on the website). Check out revenue.ie and also phone them for advice. They are very helpful and should guide you through the process, I think you can even go in and meet with them.

Do not under any circumstances try to get out of paying inheritance tax, yes it's unfair etc but it will come back and haunt you in the end! Make sure your tax afffairs are in order. Also consider getting advice from a tax consultant- check out the AITI website to find one near you!

Hope this helps and sorry to hear that your uncle passed away.

GerardKeating

MDS2009 wrote: »

Bridget T the €434,000 threshold you are referring to is in relation to gifts or inheritances from parents to children.

As you are inheriting from an Uncle you are classed as Group B for the purposes of inheritance tax or CAT Capital Acquisitions Tax. This threshold is significantly lower for inheritances from uncles.

You must pay inheritance tax in Ireland as you are resident here irrespective of where the property is located. There are expenses you can offset against the inheritance tax eg legal costs of the estate, auctioneers costs, etc.

The date the revenue will take as the valuation date of the property (ie if your uncle died in 1998 they will take the value of the property at that date and not today's date) is your uncle's date of death as this is deemed to be the date that you inherited the property.

You will have to file what is called an IT38 Form with the Revenue here (you'll find it on the website). Check out revenue.ie and also phone them for advice. They are very helpful and should guide you through the process, I think you can even go in and meet with them.

Do not under any circumstances try to get out of paying inheritance tax, yes it's unfair etc but it will come back and haunt you in the end! Make sure your tax afffairs are in order. Also consider getting advice from a tax consultant- check out the AITI website to find one near you!

Hope this helps and sorry to hear that your uncle passed away.

The op quoted the correct Group B threshold, which is €43,400

Andi123

should look at revenue site under Capital aquistion tax

(1) a person may receive a gift of €3,000 yearly which is exempt from tax
(2) then the next €43,400 is exempt and the surplus is subject to tax of 25%
(3) don't think you would be able to avail of any exemptions e.g dwelling , business etc

In the case of gift of houses or land, tax can be paid by a yearly installment for 5 years .

look at website http://www.revenue.ie/en/tax/cat/leaflets/cat1.html under how to pay