Inheritance from outside State

splinter65

My mother is about to get an inheritance from NIreland.
It will be inside the €32500 cap for CAT. She will declare it to Revenue here. Am I right in saying it won’t be taxed at all or is it added to her pensions for tax purposes or how does that pan out?
TIA

Mr. Incognito

Ask the solicitor

splinter65

Mr. Incognito wrote: »

Ask the solicitor

Ah she’s just getting a Cheque in the post. The solicitor is in N Ireland and probably wouldn’t know anything about Irish revenue.
Thought someone on here might know but thanks for your response anyway.

joeysoap

According to the revenue website it depends who she will receieve it from.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-thresholds-post-november-2011.aspx

I would contact the revenue directly to find out what’s required.

coylemj

splinter65 wrote: »

Am I right in saying it won’t be taxed at all or is it added to her pensions for tax purposes or how does that pan out?
TIA

Gifts and inheritances are treated separately from income so any liability in this situation won't affect the tax on her pension.

You mentioned €32,500 which is the group (exemption) threshold for category B so I assume the person who has left her a bequest falls into this category....

Group B: A parent, brother, sister, niece, nephew, grandparent, grandchild, lineal ancestor or a lineal descendant of the disponer.

If she has never inherited money in the past from anyone in that category then she is entitled to the full exemption from CAT (Capital Acquisition Tax) which as you say is currently €32,500.

But if she previously (no time limit) inherited from people in this category, it will be aggregated along with the current inheritance. For example, if she inherited €25,000 from a sister a few years ago, that will reduce her exemption threshold in category B by this amount so she could only inherit up to €7,500 from another sister in order to take it tax free.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-thresholds-post-november-2011.aspx

How and when do you pay?

splinter65

coylemj wrote: »

Gifts and inheritances are treated separately from income so any liability in this situation won't affect the tax on her pension.

You mentioned €32,500 which is the group (exemption) threshold for category B so I assume the person who has left her a bequest falls into this category....

Group B: A parent, brother, sister, niece, nephew, grandparent, grandchild, lineal ancestor or a lineal descendant of the disponer.

If she has never inherited money in the past from anyone in that category then she is entitled to the full exemption from CAT (Capital Acquisition Tax) which as you say is currently €32,500.

But if she previously (no time limit) inherited from people in this category, it will be aggregated along with the current inheritance. For example, if she inherited €25,000 from a sister a few years ago, that will reduce her exemption threshold in category B by this amount so she could only inherit up to €7,500 from another sister in order to take it tax free.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-thresholds-post-november-2011.aspx

How and when do you pay?

She’s never inherited anything before. I take it she can just lodge this money to her deposit account and when she’s doing her yearly tax return she can put it in then?

hullaballoo

No, Revenue are very proactive on inheritance and contact beneficiaries by letter seeking a return immediately in some cases.

coylemj

splinter65 wrote: »

She’s never inherited anything before. I take it she can just lodge this money to her deposit account and when she’s doing her yearly tax return she can put it in then?

Click on the link 'How and when do you pay' in my post above.

If the estate was in the republic then revenue here would already know about the inheritance because the executor would have already asked your mother for her PPS number. What poster hullaballo says may or may not apply as it's coming from NI.

mkdon05

This will have to be filed by the 31/10/2018 as it was received in the period 01/01/18 to 31/08/18. It has to be declared if it is over 80% of the group B threshold.

splinter65

mkdon05 wrote: »

This will have to be filed by the 31/10/2018 as it was received in the period 01/01/18 to 31/08/18. It has to be declared if it is over 80% of the group B threshold.

This is what I thought myself but I intend to ring Revenue in the morning anyway. Honest elderly people like my mother find these inheritances sometimes more stressful then their worth.

Victor

splinter65 wrote: »

Am I right in saying it won’t be taxed at all or is it added to her pensions for tax purposes or how does that pan out?

Note that if it is a social welfare non-contributory pension, there may be implications. http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/older_and_retired_people/state_pension_non_contributory.html

splinter65

Victor wrote: »

Note that if it is a social welfare non-contributory pension, there may be implications. http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/older_and_retired_people/state_pension_non_contributory.html

She has a contributory Pension thanks so she’s fine in that respect.