CAT IT38 for foreign property

Baby01032012

Hello,

I received both irish and spanish property by way of inheritence from parents. Grant of probates came through Nov 20 and Feb 21.

However with the spanish property i had to wait until probates completed, so ive started the process with spanish solicitor. Have had documents apostolised and i am completing power of attorney to act on my behalf etc. However it could take a year before this property is officially in my name, as no spanish will etc.

My question is, do i include this property in my IT38 now or wait until the process has completed in Spain at which stage ill have a spanish tax liability which i guess will be a credit against my irish CAT under the DTA?

Many thanks

Peregrinus

Pretty sure that the Ireland/Spain DTA doesn't cover Capital Acquisitions Tax (in Ireland) or inheritance tax (in Spain)

So I think the position is that you get a deduction in Ireland, not a credit, for the Inheritance tax you pay in Spain.

Suppose the property is worth €400k, and you pay inheritance tax in Spain at 20% - that's €80k. For CAT purposes you'll be treated as having inherited €320k, and your CAT liability will be calculated on that basis.

Pretty sure that you will get a deduction for the anticipated Spanish tax liability, even if the CAT liability becomes due for payment first.

Baby01032012

Thanks for the swift response Peregrinus

Ill run it by my tax advisor and maybe Revenue also. Cashflow wise it would be better if i could wait until the spanish process has completed, pay spanish inheritence tax and then pay irish CAT on the net. Rather than paying 33% now and another 20% and seeking refund here.