US Citizen Irish Inheritance

Roger C

Hi,

I’m a US Resident, and have received an inheritance from my aunt in Ireland. Do I have to pay Irish taxes on that money?

Many thanks,

Spanish Eyes

Roger C wrote: »

Hi,

I’m a US Resident, and have received an inheritance from my aunt in Ireland. Do I have to pay Irish taxes on that money?

Many thanks,

Depends on how much it is. If it exceeds €32,500 you pay Irish Capital Acquisitions Tax on the excess at 33%.

You may also have to pay US tax on the inheritance if you are a US citizen. I'm not sure on that one, so check it out yourself.

If you do have to pay tax in US aswell, there is a Double Tax Treaty where you can claim a credit for tax paid in the other country, so in effect the maximum tax you pay is the higher tax charged in either country.

Roger C

Thank you.
To clarify, my aunt has not yet passed away, but has been gifting money to her family over the past few months. Possibly in the belief that she could help us avoid paying taxes. These gifts amount to more than €32,500. Do I have to pay taxes on that money?
Once again, thanks

Squatter

Roger C wrote: »

These gifts amount to more than €32,500. Do I have to pay taxes on that money?

Yes you do.

Have a read of this and see how you get on!

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

Spanish Eyes

As Squatter above said, yes you do have to pay 33% on the excess above €32.5k whether it's a gift or an inheritance. You only mentioned inheritance in your OP.

Also, if aunt passes and leaves you anything, you will pay 33% on that amount, as your tax free threshold of €32.5 will have been used up by the gifts already given.

Geuze

Roger C wrote: »

Thank you.
To clarify, my aunt has not yet passed away, but has been gifting money to her family over the past few months. Possibly in the belief that she could help us avoid paying taxes. These gifts amount to more than €32,500. Do I have to pay taxes on that money?
Once again, thanks

The word inheritance implies a death has happened.

What you mean is that she made a gift to you.

CAT covers gifts and inheritances.

But as you don't live here, CAT won't apply.

US taxes may apply.

TomOnBoard

You're not tax resident in Ireland. So why would you pay any tax here? You would need to pay tax under US law so that's where you should be checking. Your Aunt is wise. Doing this as a gift during life leaves the Irish tax authorities out of the equation. If she did it as an inheritance, it might be more complex.

CIARAN_BOYLE

TomOnBoard wrote: »

You're not tax resident in Ireland. So why would you pay any tax here? You would need to pay tax under US law so that's where you should be checking. Your Aunt is wise. Doing this as a gift during life leaves the Irish tax authorities out of the equation. If she did it as an inheritance, it might be more complex.

If you dont know what you are talking about please shut up rathet than give advice. Pretending you know what you are talking about doesnt make you look intelligent.

The Irish government claims a ribt to tax the gift of property located in Ireland or gifts given to Irish resident individuals or by Irish resident individuals.

namenotavailablE

For further proof of what Ciaran correctly outlined, see pages 17 (gifts) and 21 (inheritances) of the following document:

https://www.revenue.ie/en/tax-professionals/documents/notes-for-guidance/cat/cat-act-guidance-notes-2015.pdf

TomOnBoard

CIARAN_BOYLE wrote: »

If you dont know what you are talking about please shut up rathet than give advice. Pretending you know what you are talking about doesnt make you look intelligent..

Right back at you!

CIARAN_BOYLE wrote: »

The Irish government claims a ribt to tax the gift of property located in Ireland or gifts given to Irish resident individuals or by Irish resident individuals.

You said it. "Property located in Ireland"

OP received money in US. Once he received the money, it was in the US, not in Ireland.

CIARAN_BOYLE

CIARAN_BOYLE wrote: »

If you dont know what you are talking about please shut up rathet than give advice. Pretending you know what you are talking about doesnt make you look intelligent.

TomOnBoard wrote: »

Right back at you!

If you are going to quote please at least to pretend to read what you quote

TomOnBoard wrote: »

You said it. "Property located in Ireland"

OP received money in US. Once he received the money, it was in the US, not in Ireland.

Read the full sentence, ill bold the relevant bit as you appear to have missed it in your haste.

CIARAN_BOYLE wrote: »

The Irish government claims a right to tax the gift of property located in Ireland or gifts given to Irish resident individuals or by Irish resident individuals.

TomOnBoard

The Irish Government can claim what it likes. The OP is a US resident and owes absolutely no obligations to the Irish Government on the face of it. Therefore, unless he chooses to self-assess, what can the Irish Government do? He received money. He needs to pay any tax due under US law, not Irish law. Clearly, if real property was involved, it would be different, but the money left his Aunt's hands in Ireland and he received it in the US.

The Irish system places the liability for the CAT on the recipient of a gift and not on the person making the gift. Obviously, if an inheritance was involved, that would be completely different: personal reps of the deceased would have a responsibility in ensuring recipients settled any CAT liability before distribution of proceeds of an estate.

OP asked 'do I have to' pay tax; I asked why 'would' he. If he had asked 'should' he pay taxes, I might have replied differently. (moral obligation, Ireland due its piece, blah, blah). So, IMHO, (All posts on Boards represent nothing but humble opinions, and as such give no other poster the right to tell another poster to 'shut up'. I also don't give any form of legal advice as that is not generally accepted on Boards; rather, I make comments and offer opinions. ) OP has no practical obligation to pay any tax to/in Ireland. If a mechanism existed whereby he might be penalised for not paying a claimed liability, I would comment differently.

There's no need to bold any more responses- I'm perfectly well able to comprehend written English.

namenotavailablE

The forum charter prohibits threads suggesting tax evasion. Personal opinion/ moral framework considerations are secondary when it comes to complying with the law as it stands.

As advised above, the current CAT rules impose a tax liability on foreign resident recipients of gifts/ inheritances if certain conditions regarding residency of the disponer or beneficiary or location of the assets. The rules (from page 21 of the PDF manual linked above) are outlined below:

"Where an inheritance is taken under a disposition made on or after 1 December 1999, all the property comprised in the inheritance is liable to tax where—

the disponer is resident or ordinarily resident in the State at the date of the disposition, or

the successor (other than a discretionary trust to which the 6% and 1% charges imposed on certain discretionary trusts under sections 15(1) and 20(1) respectively apply) is resident or ordinarily resident in the State at the date of the inheritance."


"Property located in the State is liable to inheritance tax irrespective of the residence or ordinary residence of the disponer or the successor"

thegolfer

TomOnBoard wrote: »

The Irish Government can claim what it likes. The OP is a US resident and owes absolutely no obligations to the Irish Government on the face of it. Therefore, unless he chooses to self-assess, what can the Irish Government do? He received money. He needs to pay any tax due under US law, not Irish law. Clearly, if real property was involved, it would be different, but the money left his Aunt's hands in Ireland and he received it in the US.

The Irish system places the liability for the CAT on the recipient of a gift and not on the person making the gift. Obviously, if an inheritance was involved, that would be completely different: personal reps of the deceased would have a responsibility in ensuring recipients settled any CAT liability before distribution of proceeds of an estate.

OP asked 'do I have to' pay tax; I asked why 'would' he. If he had asked 'should' he pay taxes, I might have replied differently. (moral obligation, Ireland due its piece, blah, blah). So, IMHO, (All posts on Boards represent nothing but humble opinions, and as such give no other poster the right to tell another poster to 'shut up'. I also don't give any form of legal advice as that is not generally accepted on Boards; rather, I make comments and offer opinions. ) OP has no practical obligation to pay any tax to/in Ireland. If a mechanism existed whereby he might be penalised for not paying a claimed liability, I would comment differently.

There's no need to bold any more responses- I'm perfectly well able to comprehend written English.

TomonBoard please get off the ship. You clearly do not know what you are talking about.

S.11 Cat act provides that where the disposer, aunt, is Irish resident or ordinary resident, that brings the inheritance within Irish tax obligations.

Thus the op has an Irish tax obligation.

Additionally the solicitor and representative Of The estate will have an obligation to ensure the correct tax is accounted for in Ireland.

Please dont offer you're jibberish.

TomOnBoard

thegolfer wrote: »

TomonBoard please get off the ship. You clearly do not know what you are talking about.

S.11 Cat act provides that where the disposer, aunt, is Irish resident or ordinary resident, that brings the inheritance within Irish tax obligations.

Thus the op has an Irish tax obligation.

Additionally the solicitor and representative Of The estate will have an obligation to ensure the correct tax is accounted for in Ireland.

Please dont offer you're jibberish.

Ahem, its gift tax that's under discussion here, not inheritance tax. OP clarified that pages ago, so the question of how a solicitor and/or representative deals with an estate doesn't arise... ;-)

thegolfer

TomOnBoard wrote: »

Ahem, its gift tax that's under discussion here, not inheritance tax. OP clarified that pages ago, so the question of how a solicitor and/or representative deals with an estate doesn't arise... ;-)

Sure that's great.

I'll substitute S.6 for S.11 so.

Disposer was resident and or ordinarily resident in the State at the date if the disposition.

SRASE

You should consult a tax advisor on this. Ireland has a double tax treaty with the US but this covers inheritances only. This may be more beneficial than giving gifts depending on assets that are being passed on as the US thresholds are much higher than the Irish thresholds.