It sounds like a great problem to have, but unfortunately the reality is quite different to the notion. Inheritance Tax receipts in 2018 reached record levels according to recent reports. And while a third of the €466.3m related to inheritances to sons and daughters- Category A €320,000 Threshold, the biggest income earner for the revenue in the area was the Category B group- nieces, nephews and grandchildren, comprising approx. 50% of the above figure. The tax free threshold for this group is €32,500, which is very low. The result is that people who inherit in this category will pay 33% tax on all inheritances over the €32,500 threshold, and that’s keeping the revenue very happy indeed.
The frustration for both the disponer (the person giving the inheritance) and the recipient is that with a little bit of planning in advance, the need to sell assets to clear down tax liabilities when the disponer dies can all but be avoided. If the disponer were to put a Section 72 life assurance policy in place, this policy would protect their family and their assets by providing a tax free lump sum on death which would be used to fund the expected tax bill. The proceeds of the policy are not taxed on death provided the policy is used to clear any inheritance tax bill.
This is alot simpler, cheaper and easier to implement now, while the disponer is alive,and allows you to make decisions around who inherits, rather than allowing taxrules control you or your family after you’ve gone.
Talk toGillian Madden Financial Services Ltd, we will talk you through your options, referyou to our panel of expert Tax Advisors and Legal Advisors and ensure you havethe best outcome for you, your family, business and other assets.
A little planning now, saves a lot of money later.