Brilliant article. Can clearly see why some young people still vote ffg. Their failures aren't as apparent when mammy and daddy sort out all of your financial issues, including housing...
I am being serious. And it should be 100% everywhere, then dickheads like Depardieu would have no cowardly escape options.
I am an only child and stood to inherit the modest semi-d in south Dublin. My mother was always concerned about inheritance tax having to be paid right on top of a bereavement, so after my father died she sold the house, transferred proceeds to me, I bought an apartment for her to live with me for her remaining years, and a let which would later supplement my modest pension. All happened at height of the Tiger so in spite of the tax came out of it fairly comfortably. It was a great decision of hers which spared me a lot of stress.
Hmm, now call me crazy, but it would seem like thats costing the deceased €80k.
Nope, it costs the person receiving €80k. It costs the deceased nothing.
When I pay the shopkeeper €10. I don’t think ‘it cost me €5 to give him €5, because he has to pay income tax’. Nope, I gave him a tenner. What tax the receiver of the money must pay is not a cost to person giving the money.
The value of the land is irrelevant and has no economic relation to what it can return. It is not rational, but that is the way it is.
Why is land so expensive so? Maybe because it's one way to horde wealth and pass it on tax-free?
;)
That is a minor component due to high net worth individuals sometimes buying land just for that purpose but that doesn't happen very often. I would agree with it being made more difficult to take advantage of the rule. I would instead be happy to have, say instead of the 90% reduction, that the amount you pay is calculated if and when you dispose of it. E.g a decreasing schedule of 1% per year. Pay 33% if sold in the first year, 32% if sold in the second year etc.
The main reason land is expensive is that not much is sold. People tend to keep it in the family to pass on. I think there is a stat that on average a piece of land is sold every 200 or 400 years or something like that (which I presume is just a way of saying that only 0.5% or 0.25% of land is sold in any given year). But the value of the capital is more or less irrelevant to the person whose livelihood depends on it. You are seeing it as an outside looking in and thinking of it the same way as the person who is eyeing up their parents semi-D in D4. That's not the way it works.
Another reason that it can be expensive is that land becomes crazy expensive when planning permission is granted on it. What often happens is that a landowner will then sell and pour the proceeds back into more land because that is all they know. That happened in my area in the mid-late 2000's. Lads who had had land bought for millions by developers got into bidding wars with each other and land was sold for north of 50k an acre. (at the time, you might get 150 Euro a year for an acre if you rented it out). BTW, the anyone who sold land at development prices would have been taxed on it as such.
€300k may seem like a lot of money, but it is still not enough to buy a modest home in the neighbourhood I called home. It took me another five years renting before I was able to buy an apartment fifty miles from where I grew up. This is utterly insane and should not happen
Maybe I'm reading it wrong but this doesn't make sense at all. A 300k start and 5 years of saving and you can only afford an apartment 50 miles away? Even if you weren't saving those years, 300k is a serious deposit for a mortgage and no way it pushes you 50 miles away from anywhere, certainly not for an apartment
I agree with you though, there should be better accommodations for family homes if they are going to be lived in, not rented out etc for a certain period
Of course it costs them something, if I specifically want to leave someone €500K I need to allow for €580K+.
I dunno about your relationship with your shopkeeper, but I'm not in the habit of gifting mine assets.
Banks refused to lend to me due to a “poor credit history” so I had to buy cash. The savings weren’t great as I was on a trainee accountant salary also.
It amazing the way things come back to bite you in the bollax. Know you g lads that got stupid convictions, drunk driving, smoking weed or assault and cannot travel to the US, Canada or Australia
How did you build up a por credit history
I was in my mid 20s so I didn't have a credit history. What I did have was a few bounced direct debits in my current account, no savings, a previous mortgage application which was refused (the loan I applied for to pay the inheritance tax) which in turn led to me paying the inheritance tax a few years late and facing an interest bill on that which the bank did not look too kindly on.
"You don't have a car loan, how do I know you'll pay back a mortgage?" said the bank manager.
They didn't want to give me money because I was young, unmarried and of the age where I might take off to see the world.
good article
Just rubbish no analysis
If you want some analysis, see here:
https://www.gov.ie/en/publication/7fbeb-report-of-the-commission/#foundations-for-the-future-report-of-the-commission-on-taxation-and-welfare
Executive Summary:
https://assets.gov.ie/234317/551e66d4-7f6c-492e-b81a-335c4e83ad6f.pdf
COTW recommendations:
See section 7.6.2 here for proposed reforms to CAT:
https://assets.gov.ie/234316/b4db38b0-1daa-4f7a-a309-fcce4811828c.pdf
We'll eventually follow the likes of Sweden and Norway and scrap inheritance and gift taxes altogether, in recognition of their destructive effect on society, families and business. But it's Ireland, so it'll take forever as per.
cant see that happening at all, wealth is clearly accumulating in the value of assets such as property, and with no end in sight of our property problems......
You were a trainee accountant?
Delaying the taking out of probate would have given time to build up savings
If you really wanted to keep the house that is.
I was living in the house at the time and it was a specific bequest so I inherited it the moment my mother died. I actually was unaware of this so I was late filing the inheritance tax return and this led to further issues with Revenue.
Not sure of the specifics of that. Do you have any links to show why a specific bequest could become due for CGT before probate is taken out. My understanding is that "specific bequest" just means that the beneficiary gets a specific item rather than a share in monetary value for example.
Normally the assets transfer to the executor on trust for the beneficiaries. The valuation date is the date of death. But the death itself is not an "occasion of charge" for CGT purposes. They cannot charge it at death for both logistical reasons and the fact that the beneficiary might refuse or waive the gift.
If you have any links to what you are saying, I'd be interested to read them
Under a Sinn Féín government, inheritance tax or capital gains tax would reduce to €300,000 and increase the rate for all categories to 36%.
https://www.thejournal.ie/mary-lou-mcdonald-interview-6-5951974-Dec2022/
Won't be voting for them so!
by my estimation a son/daughter who is left a million euro house netts 769,000 after tax ,less Solicitor fees,that looks pretty good to me and leaves little room for complaint unless you feel there should be no inheritance tax in this country. Or maybe you believe your particular circumstance should be the one exception to the rule.
Changing threshold will raise 43,000,000. Wouldn't run the country for five minutes. Not worth the contention. They can save billions by freezing jsa , jsb etc....
Ah but they have to target the rich. Robin Hood economics from SF.
There should be no inheritance tax in this Country, for assets left to children of the asset owner.
Those assets have been built up and fed by after tax income. Taxing inheritance is double jeopardy.
If you tax it, it comes into the exchequer and lessens the options for some inheritors.
If you dont tax it, it creates wider wealth by freeing up capital for investment and supporting jobs across the economy. Which comes back to the exchequer in income taxes anyway.
Christmas Eve and all that's bothering you is getting a bit of my money.
Not in million years I'm a few steps ahead of you.
No offence Happy Christmas anyway.
Just that not all of inheritance has had tax applied.The majority of most inheritances are made up by inflation of property assets on which no tax has been paid ,bar recent property tax payments.
nothing bothering me just on a discussion thread giving my view on inheritance tax,many happy returns.
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