Inheritance Tax and Dwelling House Relief

lms1

Scenario:

My mother passed away earlier this year having made a will. My father passed away a good number of years ago leaving everything to my mother. Everything was left between my sister and me and this is the first time we have ever received any inheritances so are trying to understand the tax implications. Hopefully someone has experienced a similar situation to us recently and can give us some guidance. Here goes…

The will divided up her estate as follows:
- Dwelling house that my mother and sister lived in left to my sister. Value approx. 300K.
- Farm house that is part of a small farm left between us, 50:50, as tenants-in-common. Value of house is approx. 80K.
- Rest, residue and remainder, including farmland left between us, 50:50. Value approx. 440K.

My sister having lived with and cared for my mother all her life meets all of Revenue’s criteria for Dwelling House relief (sorry I am a new user so cannot post URL's) with the exception of “you do not own, have an interest in or a share in any other house, including one you acquired as part of the same inheritance” due to the farm house.

I have read Revenue's "gains-gifts-and-inheritance/completing-your-gift-or-inheritance-tax-return-it38/what-is-a-disclaimer-of-benefit.aspx" but it is not clear to me what happens if my sister disclaims the farm house or accepts a payment in lieu of it…will that imply that she is able to claim dwelling house relief on the main property and pay no tax on it? What CAT liability might we have or would we be both gaining assets to the value of €220k + €40k which is under Revenue’s €310k CAT threshold.

Any advise on options greatly appreciated.

Mr. Incognito

Speak to your solicitor

lms1

Thanks Mr Incognito but is this not more of a question for Revenue and the specific rules around CAT? Appreciate that solicitor's often have tax knowledge as well but from the research I have done this does not seem to be straight forward. We do not have a solicitor (yet). I suppose what I am hoping to get from the forum is suggestions for options based on people's past experience so at least if I do go to a solicitor or Revenue that I am well armed with questions.

A good accountant would be your best bet. What part of the country are you?

lms1

Dublin.

Interested as to the accountant (Maryanne84) verses solicitor (Mr Incognito) and criteria to go to one other the other for this type of scenario.

lms1

lms1 wrote: »

Dublin.

Interested as to the accountant (Maryanne84) verses solicitor (Mr Incognito) and criteria to go to one other the other for this type of scenario.

An Accountant is an expert in all things tax related. A Solicitor isn't.

Mr. Incognito

This is a legal question.

Solicitors are versed in wills and consequences which include CAT.

Accountants are not.

In my experience a probate solicitors experience in succession and tax consequences is far superior to most accountants

I'm a solicitor by trade now but previously worked in a big 4 in tax

Income Tax, PAYE, PRSI, USC, RCT, VAT, CGT your average accountant will know more.

CAT Stamp duty and VAT on property your average solicitor will know more.

Either way take professional advice. This is not a matter for an internet forum.

ThumbTaxed

[Deleted User] wrote: »

An Accountant is an expert in all things tax related. A Solicitor isn't.

No you will find that is what tax consultants do.

Is your post actually serious?