Probate tax from 1998

Jet Black

My dad received a letter today from a solicitor, it says

The revenue have raised a query in relation to the submission of the inland revenue Affidavit on behalf of your late mother.

As your mother died in 1998, probate tax was payable on the net value of the estate. A return must now be made for probate tax and I will be obliged if you would telephone with a view to arrange an appointment to call and sign the necessary documentation.

The whole of his mothers estate was left to my dads brother back in 1998, two years ago my uncle passed away with no will and we have found out that the house is still in his mothers name.

Did my uncle not put the house in his name to avoid paying fees?
Will the monies have to be paid for a probate now and 1998?

Thanks

coylemj

From the Revenue website....

Probate Tax was introduced by Finance Act 1993 and was subsequently abolished by Finance Act 2001. Probate Tax is charged at the rate of 2% on the estates of persons dying on or after 18 June 1993 and before 6 December 2000.

http://www.revenue.ie/en/tax/cat/probate.html

So your grandmother's estate would have been liable for a charge of 2%.

Jet Black wrote: »

Did my uncle not put the house in his name to avoid paying fees?

If he figured he would never be selling the house in his lifetime he probably reckoned he was better off doing nothing. This has the result of passing on the tax liability to whoever inherits the estate.

Jet Black wrote: »

Will the monies have to be paid for a probate now and 1998?

In all probability, yes. I'm guessing that your father is the next of kin and that he now wants to sell the house in which case you will have to sort out the tax due on the estate of your grandmother. If he tries to sell the house, the prospective buyer's solicitor will query the status of the house and will want evidence that the probate tax was paid, that's why you employ a solicitor when buying a house. Otherwise it would be like buying a car with outstanding finance.

The exemption threshold is fairly high for inheritance by a child (it was €434,000 in 2009) so it's likely that your uncle was liable for no tax at all on his inheritance but as sole beneficiary of your grandmother's estate it would have fallen to him to pay the 2% probate tax. I don't know what the threshold was in 1998. The threshold for brother/sister inheritance is lower (now €33,000) so it's likely that your father will be liable for capital acquisition tax on his inheritance from his brother.

http://www.revenue.ie/en/tax/cat/thresholds.html

nompere

Probate tax thresholds in Euro:

Year Amount €
1993 12,697
1994 12,888
1995 13,193
1996 13,523
1997 13,739
1998 13,942
1999 14,285
2000 50,790

http://www.revenue.ie/en/tax/cat/leaflets/cat3.html

After 14 years there might well be significant penalties and interest. Any interest is likely to be more than the tax itself. If your solicitor isn't used to negotiating Revenue Audits - that's what you're involved with - you should consider finding a tax practitioner to assist.