Inheritance Tax….

irishguy1983

Firstly I am clueless on this so bear with me :)

I understand you paying tax on property you inherit from the folks…

If the folks give me 20,000 now and they don’t die for another 15 years how would government know? Whereas if they give me 20,000 when they pass away that is different???!

Yes I appreciate my is question is kind of ignorant but would appreciate answer…

AndrewJRenko

Financial institutions are legally obliged to report large transactions to Government.

There is a high threshold for inheritance tax. It only applies to amounts over €330k iirc.

relax carry on

https://www.boards.ie/discussion/2058266662/inheritance-tax

The link below will help you with understanding but essentially you have a lifetime threshold amount for gifs/inheritances from your parents of €335,000. Everyone also has an annual exemption amount of €3,000 from everyone else. It's self assessment system so it's up to you to know when to declare what you need to declare. And the answer to the general question about how will Revenue know is, how do Revenue know anything? It could possibly be due to the multiple sources of information they have access to.

https://www.revenue.ie/en/gains-gifts-and-inheritance/gift-and-inheritance-tax-cat/index.aspx

irishguy1983

https://www.boards.ie/discussion/comment/119720248#Comment_119720248

I hear you…

I am still a bit uncertain….Like if my mother gave me 5,000 in 2006 do I need to declare that?! I can’t even remember that….

Geuze

You only need to declare when you reach 80% of the CAT category A limit I think?

80% of 335k, I think I read that somewhere?

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

Geuze

Overview

To calculate CAT you need to know which threshold, tax rate and aggregation rules apply to a gift or inheritance. You also need to know two important dates:

• the date of the gift or inheritance, which determines the relevant threshold and rate of tax
• the valuation date, which determines the relevant pay & file period.

This section explains the thresholds, tax rates and aggregation rules that apply to a gift or inheritance.

A beneficiary must make a Self-Assessment Capital Acquisitions Tax (CAT) IT38 Return, if the taxable value of the gift or inheritance exceeds 80% of the relevant group threshold. You must include all other taxable gifts or inheritances taken from any source within the same group threshold, on or after 5 December 1991.

However, if you are claiming agricultural relief or business relief on a gift or inheritance, then you must file a CAT return. This applies even if the total taxable value of previous benefits when added to the taxable value of the current benefit qualifying for the relief, does not exceed 80% of the relevant threshold. 

For full legal definitions, see the Glossary.