Brother passed

Nonie21

My brother passed away recently, he was single and left no will.
He wanted his car (new with a small amount outstanding) left to his BIL and money to his sisters. The family want to honour his wishes but without a will I assume it will all have to go through our parents (who are both still alive) as next of kin. Is this the case?
Is this the case, will they have an allowance of 30k+ each before inheritance tax kicks in.

Thanks for any advice, we have a solicitor but my parents is unsure what he said in detail and i missed the meeting.

Atlantic Dawn

Sorry to hear of your brothers passing.

From what I understand your parents would first receive the entire estate and they would each receive €30,150 tax free, after that they would pay 33% tax on the balance. One of them should become the administrator of the estate and get a total value of it. I am not sure what would happen with the car, the finance company may have some insurance in place if the owner passes away where the balance is payed, this would be worth checking out first, either way they need to come to a value on it and may need to contact a main dealer for the brand for a valuation so this can be added to the estate. The CAT thresholds are the same for going to a brother or sister as to a parent so from a tax point of view the sum received will be the same, where you might run in to is when your parents give the money to the sisters it will form part of the €225,000 lifetime amount that can be given to each of them. For the car going to the BIL he would be in Group C to your parents so would be able to receive €15,075 from them as the value of the car and the balance taxed at 33%.


There's good information on this government website...

http://www.citizensinformation.ie/en/death/the_deceaseds_estate/what_happens_the_deceaseds_estate.html

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

Nonie21

Re. the car for instance, will they have to pay 33% of the value in CAT though when it goes to them?

Nonie21

Re. the car, will they have to pay 33% of the value (less whats owed i assume) in CAT though when it goes to the parents?

Atlantic Dawn

Nonie21 wrote: »

Re. the car, will they have to pay 33% of the value (less whats owed i assume) in CAT though when it goes to the parents?

It gets kind of complex as the value of the car forms part of the estate, its value will be added to the value of his other assets and the total balance over €60,300 (€30,150x2) will be liable for 33% tax. The car passing from the parents to the BIL will be considered a gift and would be liable for 33% CAT on the balance over €15,075. If it was me I would transfer the car to the daughter (BIL's wife) and the threshold would be €225,000, the car can be owned by one spouse and insured by the other without any issue.

Nonie21

Thanks, that's what i expected.

Atlantic Dawn

Nonie21 wrote: »

Thanks, that's what i expected.

I would visit a solicitor too to get definitive advice but that's the basics.

Marcusm

Atlantic Dawn wrote: »

It gets kind of complex as the value of the car forms part of the estate, its value will be added to the value of his other assets and the total balance over €60,300 (€30,150x2) will be liable for 33% tax. The car passing from the parents to the BIL will be considered a gift and would be liable for 33% CAT on the balance over €15,075. If it was me I would transfer the car to the daughter (BIL's wife) and the threshold would be €225,000, the car can be owned by one spouse and insured by the other without any issue.

Atlantic Dawn wrote: »

I would visit a solicitor too to get definitive advice but that's the basics.

Without meaning to be harsh, your good advice is the last part. The OP's family would be best served by dealing with a tax advisor with a decent knowledge of estate planning. A simple deed of arrangement would likely resolve the double gifting arrangements being described.