inheritance tax

fire_man

Hi,

I was left a house from my late uncle.House is worth about 60k.How much tax would I pay approx.?

thanks

Atlantic Dawn

Roughly €9850 providing it's your first inheritance from Group B.

http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html

danmanw8

There is a tax free threshold of €30,150 for a niece/nephew receiving an inheritance. You pay 33% on the balance.

If the house was left to you AND a partner (who is not directly related to your uncle) then there's another tax free allowance of €15,075

The threshold is a lifetime threshold (ie you cant use it for two inheritances from the same group: http://www.revenue.ie/en/tax/cat/thresholds.html

fire_man

Thanks for replies. Ya this will be first time getting inheritance.Can I pay this tax over time or does it have to be paid in a lump sum?

brinty

Might be a stupid thing to ask and I'm a while out-of tax practice but you might qualify as a preferred niece/nephew if your uncle had no kids...

BorneTobyWilde

What if you are left a house by a parent and house if worth 275,000 ?

fire_man

I must look into that brinty might save me nice bit.

Munstermissy

On a similar line if anybody can assist? Aunt passed away in 2008 and her husband had lifetime interest in property. He passed away in 2013. Property value rose in the intervening years. I had to pay on 2013 allowances. I was chatting recently to someone I know working in revenue and they mentioned that the value should be index-linked.

I tried looking at the revenue site but couldn't find examples to work out if I am due a refund. Is it a % that is index linked??

Any input greatly appreciated.

danmanw8

Munstermissy wrote: »

On a similar line if anybody can assist? Aunt passed away in 2008 and her husband had lifetime interest in property. He passed away in 2013. Property value rose in the intervening years. I had to pay on 2013 allowances. I was chatting recently to someone I know working in revenue and they mentioned that the value should be index-linked.

I tried looking at the revenue site but couldn't find examples to work out if I am due a refund. Is it a % that is index linked??

Any input greatly appreciated.

"The indexation of the tax-free group thresholds is abolished for gifts and inheritances taken on or after 7 December 2011."

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

danmanw8

BorneTobyWilde wrote: »

What if you are left a house by a parent and house if worth 275,000 ?

If it was after 14/10/15 then the tax free threshold is 280k

fire_man

Anyone know if tax bill has to be paid in lump sum or can you pay overtime.Thanks

tea and coffee

BorneTobyWilde wrote: »

What if you are left a house by a parent and house if worth 275,000 ?

Then you pay no tax as you're under the threshold , providing that the inheritance was after October last year, and you haven't previously inherited from a parent. If it was before October last year, but after Dec 2012 then you'll pay tax @33% on the 50k of it, as threshold then was 225k.

tea and coffee

fire_man wrote: »

Anyone know if tax bill has to be paid in lump sum or can you pay overtime.Thanks

You must pay and file before the end of the tax year.

tea and coffee

Here is the example given by Revenue : The Finance Act 2012 amended the Pay and File date for CAT from 30 September to 31 October.

Therefore all gifts and inheritances with a valuation date in the 12 month period ending on the previous 31 August will be included in the return to be filed by 31 October 2012. This means where the valuation date arises between 1 January 2012 and 31 August 2012, the Pay & File deadline is 31 October 2012. Where the valuation date arises between 1 September 2012 and 31 December 2012, the Pay & File deadline would be 31 October 2013.

For the year of assessment 2011 the pay and file date was 30 September 2011.

Examples:

Valuation date 21 February 2012: File IT 38 and pay tax by 31 October 2012
Valuation date 6 November 2012: File IT 38 and pay tax by 31 October 2013

Lyra Fangs

brinty wrote: »

Might be a stupid thing to ask and I'm a while out-of tax practice but you might qualify as a preferred niece/nephew if your uncle had no kids...

That only applies if it's a business being inherited and the niece/nephew worked there approx 15hrs/week for a small family run business.

Lyra Fangs

tea and coffee wrote: »

You must pay and file before the end of the tax year.

For inheritance tax it depends on the date of valuation of the inheritance - if it's between 1 Jan - 31 Aug then you must pay and file by 31 Oct of that year but if it's between 1 Sep and 31 Dec then you file/pay by 31 Oct of the following year.

Lyra Fangs

fire_man wrote: »

Anyone know if tax bill has to be paid in lump sum or can you pay overtime.Thanks

For CAT --> payment by instalment is only available for real property (land, buildings) and limited interests.

Can pay in 5 instalments starting from 31 Oct BUT interest applies to unpaid balance (@ .0219% per day).

stephenwinder

What does the date of valuation mean? Is it the date of death? Or the date probate was issued? Or some other date?

adrianw

Date of death

nompere

stephenwinder wrote: »

What does the date of valuation mean? Is it the date of death? Or the date probate was issued? Or some other date?

For inheritances, the date of death is the date of the inheritance. That sets the tax rate and the threshold. The valuation date is usually, but not always, the date of the grant of probate or letters of administration. The valuation date sets the payment date for the tax.

If the valuation date is important, for some reason or other, then you will probably need professional help.

asteroids over berlin

Inheritance tax - you got to be kidding me. Somebody spends most of their life paying off a mortgage , should they not have a right to pass the property on to whoever they want (tax free). Farcical

holyhead

asteroids over berlin wrote: »

Inheritance tax - you got to be kidding me. Somebody spends most of their life paying off a mortgage , should they not have a right to pass the property on to whoever they want (tax free). Farcical

I would agree with you that they should have the right to (tax free) pass it on to whomever they choose. It really does add injury to insult that an asset which was acquired with legally accrued money is then subject to inheritance at the point of transfer, spouse excepted in the case of a house. Inheritance tax is a serious bug bearer to me. People don't always have the monies to meet inheritance dues. Yes they are inheriting an asset which is worth money. But lets say they have to sell the asset to meet the inheritance liability then their caught for tax on the sale of the asset. A double whammy.

Squatter

asteroids over berlin wrote: »

Inheritance tax - you got to be kidding me. Somebody spends most of their life paying off a mortgage , should they not have a right to pass the property on to whoever they want (tax free).

Of course they should! And they have that right!

What you're actually complaining about is the fact that the person who receives such a gift may be liable to pay CAT on all or part of the value of the gift, if it's value is over the specified threshold. But the donor isn't liable to pay any tax, for the very reason that you yourself set out!

heretothere

I think inheritance tax is a bit cruel too. Luckily or unluckily I doubt I will ever have to pay it though!

holyhead

Our Dad passed away and his residual went to me. His residual included his pension as it wasn't otherwise specified. Can our mother be the beneficiary if me and my siblings are in agreement. I believe it was an oversight on his part.

heretothere

Do you mean his residence? I'm not sure what a residual is.

You'll need to seek professional advice from a solicitor or a tax consultant. I believe you can 'reject' the will I'm not sure how to do this or the ramifications. Your mam can also contest the will (even if you are all in agreement)

Sorry for your loss.

holyhead

What I am learning from the whole inheritance scenario is
1. that revenue make it nigh impossible to use cash you have built up in your business to satisfy an inheritance demand from revenue.
2. revenue only allow a small figure for working capital beyond which cash in the business is seen as taxable for inheritance.
3. if you personally inherit a building/own a building the trading company cannot renovate the building without the owner being taxed as revenue see it as a form of benefit in kind.

I am sharing this to maybe help someone else in a similar boat in some or all of these scenarios. I do believe inheritance tax is nonsense but that is not my central point in this post. It is to point out how much of a minefield inheritance tax is/can be for a business.

Also if writing a will be sure your wishes as explicitly stated and unambiguous and comprehensive. We are learning this the hard way.

heretothere

Is it a house or a business you have inherited?

If you are using money from your own personal company in order to pay the inheritance tax on your father's house this will be seen as you drawing money out of your company and as such liable to income tax.

The other points I'm not really sure what you are asking.

Again I think it is time to speak to a specialist. I am pretty sure you can choose not to accept the inheritance from your father and nominate your mother. Property passed between spouses is not subject to CAT. And I really really do not want to sound unsympathetic, make sure (When she is ready) that your mother has a proper will in place. As otherwise everything will sit in probate for a year and can be bitterly contested.

4ensic15

holyhead wrote: »

Our Dad passed away and his residual went to me. His residual included his pension as it wasn't otherwise specified. Can our mother be the beneficiary if me and my siblings are in agreement. I believe it was an oversight on his part.

I take it you mean the residue. If all of your siblings disclaim their entitlements under the will along with you the pension would go to your mother.