Who’s going to get your dosh? Wills & Inheritance Discussion

07-04-2021 2:02pm #1

I’d be interested to hear challenges, solutions stories and thoughts around who you intend leaving your vast wealth and estate to when you leave this mortal coil:D

And also to post general links to current relevant tax thresholds etc

With no children to inherit, wills are not always an easy thing to get right for single people or those with no dependents and often can lead to the tax man getting a fair whack when others whom were dear to you might have benefited in some way.

Whether you’ve no children or loads, I’d also welcome stories from being on the receiving end of a will as beneficiary, say from an aunt or uncle and how you might have done it differently if you were them.

Important we all make a will as it’s a pain in the arse for those left behind to sort your affairs.
A few useful links to start off-feel free to post more where relevant

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

https://www.citizensinformation.ie/en/death/before_a_death/making_a_will.html

07-04-2021 2:08pm

I really don't intend to leave too much money to anyone, hopefully I'll spend my retirement flitering it all away

However, in the mean time, I do have a will because my next of kin are my parents and I will not leave a single penny to my father!
So, if I die young(ish) my mother will get most, plus my siblings and niece & nephew.
I also plan to leave something to my godson and a couple of friends. Also, a few charities will get a bit of cash.

If I live to old age and there is any money left, then niece, nephew and godson will get the leftovers. If there is tax to be paid, they can pay it!

pinkypinky · 07-04-2021 5:27pm

I was looking into this recently and shocked to discover the tax-free threshold for niblings is €32500, but that's cumulative. So if person A inherited more than that from Aunt A, then Aunt B's bequest would be all taxable as would any subsequent ones.

If I get a point of comfort, I'd plan to gift each nibling €3000 a year under the regular gift tax rules, which wouldn't affect the above.

R.D. aka MR.D · 07-04-2021 5:37pm

We've decided that we would like our money and assets to go to charity or if we have enough money :rolleyes: maybe a scholarship for some aspect of education that we are passionate about.

I don't plan to have much left as I want to spend as much as possible before I go! But for us, we have so many nieces and nephews between us that we can't see ourselves leaving anything to anyone in particular. It would be better for it to go somewhere there is a hope of it making some difference or impact, honestly even if the taxman does get it, it might go back into the country and support services or whatever. That seems like a better use of money than leaving to family members who have little to no need of it. Neither of our families have been particularly supportive of our life choices so I think that drives us as well.

07-04-2021 9:00pm

pinkypinky wrote: »

I was looking into this recently and shocked to discover the tax-free threshold for niblings is €32500, but that's cumulative. So if person A inherited more than that from Aunt A, then Aunt B's bequest would be all taxable as would any subsequent ones.

If I get a point of comfort, I'd plan to gift each nibling €3000 a year under the regular gift tax rules, which wouldn't affect the above.

It’s good to hear that your looking and getting informed. I’ve been on the receiving end of a few badly written (solicitors fault) and badly thought out (lack of knowledge on tax implications) wills through the years and you just roll your eyes at the result -especially where the taxman cleans up needlessly but at that point it’s too late.

One such instance an aunt gave most nieces and nephews about 5k each from a pool of about 60k savings ( very nice)?and the remaining 50% of her savings will to a “favourite” niece- favourite my arse, the niece marched her into the solicitors office when she was at least 2 years with mild dementia :P but later the Aunt inherited a further 100k or so- all now with the niece minus inheritance tax- aunt was too far down dementia road to even know no less do anything about it-
So wordings of a will are very important - had the aunt expressed a percentage for each nephew and niece such as 9% it would have meant more money for most people overall and less to taxman and the “favourite” niece would still have done well out of it.

Cherry Blossom · 08-04-2021 8:36pm

I have 11 nieces and nephews, to spread my little bit wealth between them all theyd get very little each. So I made my will and left it between the two that are my godchildren. If I die tomorrow they’ll have enough to be a help through college years if they decide to go or get them some driving lessons and get their first car on the road if they don’t go to college/uni.

08-04-2021 9:12pm

So standard inheritance tax free allowance for nephew or niece is currently €32,500
Anything above this level is taxed at 33%

Article in Irish Examiner last year focusing on nieces working for Uncle/Aunt in a business or agricultural setting who could gain considerable additional reliefs- terms and conditions of course apply but might be of interest to some here
https://www.irishexaminer.com/farming/arid-40021115.html?type=amp

08-04-2021 9:18pm

If someone is lucky enough to get an inheritance, then paying a few quid tax shouldn't matter to them.

pinkypinky · 08-04-2021 9:56pm

bubblypop wrote: »

If someone is lucky enough to get an inheritance, then paying a few quid tax shouldn't matter to them.

Sure, but planning can help mean that the State is not the primary beneficiary of your estate.

08-04-2021 11:59pm

pinkypinky wrote: »

Sure, but planning can help mean that the State is not the primary beneficiary of your estate.

Exactly and which is one of the key reasons I set up this thread- from experience many child-free aunts and uncles don’t spend enough time researching the most tax efficient ways of implementing their wishes and end up giving a whole heap to revenue where their intentions were far from that-and that’s the point- your wishes may never be fulfilled if you don’t research the financial and practical implications of what your intentions are.

fair enough if you choose to give great portions of your estate, back to the state, but at least make informed choices- leaving a house to just one person may mean they have to sell it to pay the tax and may never benefit from a “roof over their head” as you may have intended.

magicbastarder · 09-04-2021 12:07am

i reckon any inheritance tax paid should be paid at full marginal rate, with no allowance. i know it's a topic that gets some peoples backs up, but unearned income should be taxed to the hilt.
i used to know someone who grew up *quite* well off, and at one point about 20+ years ago was getting IRL£800 a week pocket money from his parents, and paying no tax on it because he'd not yet hit the inheritance tax threshold.
at the time i was the poor schmuck working and earning about 15k p.a. and paying tax on it, while he wasn't paying tax on a 40k p.a. income despite contributing nothing to the economy.

09-04-2021 12:09am

Yep, I agree, anyone who inherits money should be happy to get some, and pay the bit of tax.

domrush · 09-04-2021 12:14am

magicbastarder wrote: »

i reckon any inheritance tax paid should be paid at full marginal rate, with no allowance. i know it's a topic that gets some peoples backs up, but unearned income should be taxed to the hilt.
i used to know someone who grew up *quite* well off, and at one point about 20+ years ago was getting IRL£800 a week pocket money from his parents, and paying no tax on it because he'd not yet hit the inheritance tax threshold.
at the time i was the poor schmuck working and earning about 15k p.a. and paying tax on it, while he wasn't paying tax on a 40k p.a. income despite contributing nothing to the economy.

This would make it impossible to pass on a family home, as there would be huge tax bill due on the house. The person inheriting would have to immediately sell the house

dublin49 · 09-04-2021 12:15am

magicbastarder wrote: »

i reckon any inheritance tax paid should be paid at full marginal rate, with no allowance.

Inclined to agree but you'll be waiting.Any politican even mumbling those sentiments under his breadth would be mincemeat at election time.The rich like their inheritances and the poor don't vote.

magicbastarder · 09-04-2021 12:18am

domrush wrote: »

This would make it impossible to pass on a family home, as there would be huge tax bill due on the house. The person inheriting would have to immediately sell the house

if you're living in the house, yeah of course you have to make allowances. if not, you've a year to sell it.

slavetothegrind · 09-04-2021 12:19am

"the bit of tax" it can be a large chunk.
I have no such inheritance coming but should i be struck down and chose to pass on my few quid to someone, the few quid i ALREADY paid tax on, surely my choice? How the hell can you justify taking another bite?

bb12 · 09-04-2021 12:21am

this is a personal bugbear of mine. in my opinion the inheritance tax burden on childless people is complete discrimination in this country. i spend my whole life working and paying tax and then paying a mortgage out of the income that is left...all for the taxman to come along and grab another 33% after i'm gone. just because i have no kids. if the system was fair childless people should be able to nominate a couple of people to avail of the same thresholds that people with kids have. it's completely unjust in my view. the taxman must be laughing all the way to back especially with the rise in people not having kids in recent times.

i would love to leave my property to a niece or nephew to help keep it in the family as it was passed down to me...but i would end up leaving them with a huge tax bill and they would probably have to sell it just to settle that bill

completely unfair and unequal in my view and i don't know why this hasn't been challenged more over the years

magicbastarder · 09-04-2021 12:27am

slavetothegrind wrote: »

"the bit of tax" it can be a large chunk.
I have no such inheritance coming but should i be struck down and chose to pass on my few quid to someone, the few quid i ALREADY paid tax on, surely my choice? How the hell can you justify taking another bite?

you may have paid tax on it. the recipient didn't. you're - by definition - dead. what tax you paid is irrelevant.
it's unearned income for them.

bb12 · 09-04-2021 12:31am

magicbastarder wrote: »

you may have paid tax on it. the recipient didn't.
it's unearned income for them.

it's also unearned income for sons and daughters but they get away without having to pay much tax

what's the threshold? circa 350k vs 32k for nieces and nephews?

childless people getting screwed over after they're dead

magicbastarder · 09-04-2021 12:34am

bb12 wrote: »

childless people getting screwed over after they're dead

yeah, which is why i would argue for no tax free allowance. that you should be able to leave whatever you want to anyone (bar charities) but they start paying tax on the first euro.

slavetothegrind · 09-04-2021 12:35am

So you are saying my money, after tax, is only my money to spend. If i give it to Mary it's now a different money that now becomes taxable again.
This is not just after death btw, if i gave magicbastarder 50k of my after tax savings now whilst i am alive he has to pay tax on it.

If i piss it away in the bookmakers thats fine, or travel the world first class for a month. But if i want to gift my TAXPAID earnings to magicbastarder whoa.....more tax please......

magicbastarder · 09-04-2021 12:39am

slavetothegrind wrote: »

If i give it to Mary it's now a different money that now becomes taxable again.

yes, precisely.
if you give it to mary, it's unearned - not even earned - income for her.

mary already pays tax on her earned income. why should she be exempt from tax on her unearned income?

slavetothegrind · 09-04-2021 12:39am

because i paid the tax on the income already!

magicbastarder · 09-04-2021 12:40am

so? *you* paid tax on *your* income.
why does that exempt her on paying tax on *her* income?

markodaly · 09-04-2021 12:41am

bb12 wrote: »

this is a personal bugbear of mine. in my opinion the inheritance tax burden on childless people is complete discrimination in this country. i spend my whole life working and paying tax and then paying a mortgage out of the income that is left...all for the taxman to come along and grab another 33% after i'm gone. just because i have no kids. if the system was fair childless people should be able to nominate a couple of people to avail of the same thresholds that people with kids have. it's completely unjust in my view. the taxman must be laughing all the way to back especially with the rise in people not having kids in recent times.

i would love to leave my property to a niece or nephew to help keep it in the family as it was passed down to me...but i would end up leaving them with a huge tax bill and they would probably have to sell it just to settle that bill

completely unfair and unequal in my view and i don't know why this hasn't been challenged more over the years

Well in fairness, when you retire the services you will be availing off, either the OAP, Health services, free TV licence and all that is paid for by working people. I.E the children of others.

It is just the way the cookie crumbles. It is not like children are free to raise either. People with no children, especially DINKY's are usually much more well off.

slavetothegrind · 09-04-2021 12:41am

if you follow it through, if i buy you a coffee at 4 euro, you didn't earn it. You owe 33 percent of 4 euro to the tax man.
Madness!

magicbastarder · 09-04-2021 12:43am

slavetothegrind wrote: »

if i buy you a coffee at 4 euro

where are you buying coffees? if you're paying 4 quid a pop, i'm suprised you're complaining about having your money taken off you.

markodaly · 09-04-2021 12:44am

magicbastarder wrote: »

yes, precisely.
if you give it to mary, it's unearned - not even earned - income for her.

mary already pays tax on her earned income. why should she be exempt from tax on her unearned income?

Giving it to charity is also unearned. Just saying...
Put it this way, why should the state or a charity, like the RCC, have a right to one's assets more so than a son or daughter or a niece or nephew?

slavetothegrind · 09-04-2021 12:46am

I did laugh at that. I was grasping at examples don't drink the stuff :-)

magicbastarder · 09-04-2021 12:48am

markodaly wrote: »

Giving it to charity is also unearned. Just saying...
Put it this way, why should the state or a charity, like the RCC, have a right to one's assets more so than a son or daughter or a niece or nephew?

because they enjoy tax free status?
why is this so difficult? i pay tax on my income because i am not a charity. a charity does not, well, because they are a charity.

i will spend that income on things like €4 coffees and nice curtains and beer, whereas deserving charities (which excludes the RCC in my book) will spend it on deserving causes.

bb12 · 09-04-2021 12:51am

markodaly wrote: »

Well in fairness, when you retire the services you will be availing off, either the OAP, Health services, free TV licence and all that is paid for by working people. I.E the children of others.

It is just the way the cookie crumbles. It is not like children are free to raise either. People with no children, especially DINKY's are usually much more well off.

you mean the pension and services they keep saying we won't have when we retire because there will be no money left in the pot?

by that rationale then kids should also have ther inheritance taxed at the same rate to contribute to society. also by that rationale why should any of my current tax euros go towards any educational or child welfare causes when none of it applies to me?

09-04-2021 12:57am

I honestly hadn't thought too much about this until this thread

As it stands right now, I'll be buying a place later this year with my wife, who, due to a much healthier lifestyle, is likely to outlive me by a significant amount of years. As a result I'll just be leaving everything to her.

On the remote chance that I survive her, I'll revisit the situation then, at which point I'll probably set things up so that my step-sons get a portion, along with my neices and nephews.

I don't plan on worrying about the tax implications, I'll be dead

magicbastarder · 09-04-2021 1:00am

markodaly wrote: »

Giving it to charity is also unearned.

also, if properly regulated, a charity *does* earn its income.
simply taking money from my dead parents because they have 300k to give me does not mean i have 'earned' it.

as it stands, under current law, i could inherit i think about a third of a million, tax free, and use it to buy a vintage ferrari, hair extensions, and a permatan. charities are regulated and (in theory) must spend the money on their stated aims, to the betterment of society.

beauf · 09-04-2021 1:34am

Been a lot of scandals with charities. Don't forget about fair deal either. Lots of rules around that. If you want to pass on your wealth as you wish.

Inheritance is a curious mechanism, especially when you consider who gains most from it.

https://youtu.be/MRpEV2tmYz4

While we might disagree with the ideas here. There seems to be agreement that kids are a huge financial commitment, drain etc. Unsound financially.

I don't know enough about the economics of inheritance as it effects society at large but it is different in other countries. It would be interesting to see how it works in other places and other society's and it's it better than here.

This is an interesting thread though.

09-04-2021 1:52am

Personally, I'd have no interest in leaving money to charity. I've seen too many (both national and local) 'financial irregularities' to bother.

My brother has two kids, so I'd likely just leave to them. I don't have a will yet, though, as my dad is still alive and kicking, and I wouldn't begrudge him the small amount I already have (I just automatically presume it'd go to him - could be wrong!)

09-04-2021 9:44am

Hi guys,
Thanks for contributions to date- it’s great reading through the thread and seeing the penny drop for some of you in relation to niece/nephew inheritance tax implications- while this is a topic I’ve been fairly informed on for years now, I’m also aware that a lot of people don’t know the basics which is so important if your wishes are to be implemented after you die.

Here’s another example from my personal and direct experience:

Childfree married couple husband and wife, make their will about 20 years ago (both in 80s now)
Husband has no living family so all estate to go to wife’s 4 siblings.
Roll on 20 years and wife now has advanced dementia- husband still sharp mentally.
Some of the wife’s siblings have died- the rest are old and being well looked after.
Husband does new will giving their estate to the wife’s nieces and nephews which makes more practical sense and nominates an executor.

So here is how things will play out -if husband dies before wife, then it’s the original will from 20 years ago that will get implemented. If wife dies first, the husbands new will kicks in.

So lesson here really is, if you make a will, do go back and review it as you get older-fair dues to the husband here as he’s very old himself - not everyone would do this.

if you nominated a relative as executor make sure they’re still around or in the right health- if you’re giving all to just brothers and sisters remember they will possibly be as old as you or older or dead by the time you die, assuming average life span of all.

fits · 09-04-2021 10:02am

Another point to consider that folks might not be aware of. If you consider leaving a large amount to someone with a disability they could lose their benefits if it’s not done in a particular way. So getting advice is really important as things may pop up that you haven’t considered.

09-04-2021 10:10am

Tbh, if my niece & nephew are lucky enough to get a windfall of a few hundred thousand euro each, then I would hope they wouldn't be put out because they have to pay some tax!
If I was lucky enough to be left some money in a will, which I won't be, I would be delighted with whatever I got. I wouldn't waste my time worrying about the money gone on tax!

magicbastarder · 09-04-2021 10:18am

beauf wrote: »

Been a lot of scandals with charities.

of course there has, but the number of scandals is *vastly* outweighed by the number of charities.

09-04-2021 10:23am

bubblypop wrote: »

Tbh, if my niece & nephew are lucky enough to get a windfall of a few hundred thousand euro each, then I would hope they wouldn't be put out because they have to pay some tax!
If I was lucky enough to be left some money in a will, which I won't be, I would be delighted with whatever I got. I wouldn't waste my time worrying about the money gone on tax!

The thread is not about tax per-se it’s about making informed decisions. It’s likely some tax will be paid in most wills where there are no children inheriting and even then depending on value of estate there can be tax liabilities for dependents also.

Say you leave your sister 100k with the intention of it helping out her 5 children- with tax free allowance of 32,500 for siblings, the rest taxed at 33%, this means your sisters family now has less than 80k- had you willed 20k to each of the 5 dependents of your sister or split between sister and her dependents, assuming they did not receive any other inheritances no tax is due- soy they’re benefiting from the full 100k

gmisk · 09-04-2021 10:23am

I honestly think smallish amount to my niece and nephews and the rest to a dog charity, maybe dogs trust.

pinkypinky · 09-04-2021 10:26am

bb12 wrote: »

this is a personal bugbear of mine. in my opinion the inheritance tax burden on childless people is complete discrimination in this country. i spend my whole life working and paying tax and then paying a mortgage out of the income that is left...all for the taxman to come along and grab another 33% after i'm gone. just because i have no kids. if the system was fair childless people should be able to nominate a couple of people to avail of the same thresholds that people with kids have. it's completely unjust in my view. the taxman must be laughing all the way to back especially with the rise in people not having kids in recent times.

i would love to leave my property to a niece or nephew to help keep it in the family as it was passed down to me...but i would end up leaving them with a huge tax bill and they would probably have to sell it just to settle that bill

completely unfair and unequal in my view and i don't know why this hasn't been challenged more over the years

Because most people have children and it's therefore deemed largely irrelevant.

quickbeam · 09-04-2021 10:41am

I have no family, and I don't trust charities. I actually don't know who to pass stuff on when I'm gone. It's a genuine concern.

09-04-2021 10:58am

quickbeam wrote: »

I have no family, and I don't trust charities. I actually don't know who to pass stuff on when I'm gone. It's a genuine concern.

Me me me

Maybe think about what interests you like the Arts, Sport, etc maybe there’s a way of willing your estate to the arts council or Sport Ireland or say The Abbey Theatre ?
Also lots of old heritage houses open to the public in the hands of the OPW which always need funds and are benefiting society as a whole

Faith · 09-04-2021 11:01am

quickbeam wrote: »

I have no family, and I don't trust charities. I actually don't know who to pass stuff on when I'm gone. It's a genuine concern.

Science, research, academia, the community, perhaps?

I think I'd like to leave a good chunk to areas close to my heart, something like research into nasty diseases in cats and dogs in the hope of helping to find a cure, or possible something in human disease research.

09-04-2021 11:09am

bb12 wrote: »

i would love to leave my property to a niece or nephew to help keep it in the family as it was passed down to me...but i would end up leaving them with a huge tax bill and they would probably have to sell it just to settle that bill

They would probably just get a very easily secured mortgage for the relevant amount of less than a third of the property value, to be fair

pinkypinky · 09-04-2021 11:10am

I'm heavily involved with a family history society and though I haven't made a plan yet, I do want to leave a bequest to them.

09-04-2021 11:11am

markodaly wrote: »

Giving it to charity is also unearned. Just saying...
Put it this way, why should the state or a charity, like the RCC, have a right to one's assets more so than a son or daughter or a niece or nephew?

They shouldn't! But thats a different matter.

09-04-2021 11:18am

The irish system does have protections for a person's home, as i understand it

Im not fully au fait but if a nephew/niece were to inherit a home they had been living in themselves for a period and was to be their home going forward i believe they get certain considerations

magicbastarder · 09-04-2021 11:23am

bb12 wrote: »

i would love to leave my property to a niece or nephew to help keep it in the family as it was passed down to me...but i would end up leaving them with a huge tax bill and they would probably have to sell it just to settle that bill

this presumes that you want them to move into the property, though, does it? it may not suit them to do so.
or else you're leaving it to them to rent out, which may not be your desired outcome, it's not really a 'family home' if it's an investment property.

also; leaving property to someone because you want to keep it in the family could create an unfair burden or obligation on them; if you leave someone property, you should accept that they should be able to sell it at the drop of a hat if they wish, and not keep it in the family because that's what you wanted.

as above, if you did want to leave it to a nibling, and they did want to live in it, i suspect moving them in with you first is the most effective way around a lot of inheritance tax concerns.

09-04-2021 1:05pm

[Deleted User] wrote: »

The thread is not about tax per-se it’s about making informed decisions. It’s likely some tax will be paid in most wills where there are no children inheriting and even then depending on value of estate there can be tax liabilities for dependents also.

Say you leave your sister 100k with the intention of it helping out her 5 children- with tax free allowance of 32,500 for siblings, the rest taxed at 33%, this means your sisters family now has less than 80k- had you willed 20k to each of the 5 dependents of your sister or split between sister and her dependents, assuming they did not receive any other inheritances no tax is due- soy they’re benefiting from the full 100k

I'm aware of how it works. If someone has to pay a bit of tax because I left them money, they are still lucky enough to get free money.

Who’s going to get your dosh? Wills & Inheritance Discussion

Have you made a will? NB-Thread is for general discussion only (Note Post 59) 40 votes

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