Inheritance tax

pami_81

Just a quick question about inheritance tax... Is this taken out of the amount that a person is inheriting, or does the heir receive the full amount and then have to pay the tax separately? If the latter, does the inheritance tax affect the heir's income tax?

Also, how long does it approximately take the heir to receive any money that has been left for them?

mathepac

The executor must

• pay any debts due from the testator
• deduct all taxes due to the Revenue from the testator
• deduct all other fees and expenses due from the estate (e.g. estate agent, solicitor, probate fees, funeral costs, executor expenses, etc.)
• deduct CAT (inheritance tax) from the amount payable to each beneficiary - this may vary from beneficiary depending on
• their relationship to the testator
• previous gifts or inheritances
• etc.

So what each beneficiary receives is an amount net of all deductions / taxes. This is why the executor needs the PPSN for each beneficiary. In general, there are no other deductions or taxes due on the amount the beneficiary receives, until s/he invests it and / or earns income from it.

The last part of your question is impossible to answer; it may take months, in complex cases it may take years.