Month: June 2019

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Inheritance Tax at record high

As reported in the Irish Times today, inheritance tax collected by the Exchequer in 2018 has reached a record high of €466.3 million, up by 10% on the previous year.

This sharp increase is due to increased growth in property prices and the unchanged tax free thresholds.

If you are due to inherit a property worth €480,000, you are liable to pay 33% tax on the difference between your threshold and what the property is worth…

See below to a guidline of current thresholds;

Group Relationship to Disponer Threshold
A Child (incl adopted, foster & step children) €320,000
B Sibling, Niece, Nephew €32,500
C Other €16,250

As always there are some exemptions that may apply, such as if you have always lived in the family home and you plan to remain living there after their deaths you may be exempt.

Section 72 policies taken out by the disponer may cover any inheritance tax due. Many parents take out this policy to ensure their children are not liable for tax when inheriting their estate.

The Government has stated plans to increase Group A threshold to €500,000 over time. In last year’s budget, Group A’s threshold was increased by €10,000. This is still resulting in a high number of people having to pay inheritance tax.

The average tax payment was €29,776 per person in 2018, but bearing in mind this will differ by county, with Dublin accounting for 44% of all inheritance tax paid last year due to higher house prices.

But with Group B being such a low threshold, this is proving to be the higher revenue earner, as it accounted for 50% of all inheritance tax payments in 2018

Why not read some of our previous blogs here

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Why you should file your Tax Return early

The 31st October Income Tax Return deadline….. is just that…. a deadline and not a target!

Your tax return can be filed at any time between 01st January – 31st October.

Here are 5 reasons why you should file your Tax Return early this year

1. Plan Ahead

If you file your return and are due to pay a liability, this is due by 31st October. Therefore, if your liability is calculated in advance, it gives you time to prepare and budget.

2. Less Stress

Submitting your paperwork to your accountant early means there is less pressure on both sides to complete and file your return on time. Giving your accountant more time to prepare and review your return.

If your paperwork is received late or too near the deadline, your accountant may not be able to guarantee filing it on time.

3. Avoid Surcharges

If your return is filed after the deadline of 31st October you will be subject to surcharges and interest owed. You also run a higher risk of being selected for an audit.

4. More efficient

The longer you leave your return nearer the deadline, the busier Revenue will be. If you are due a refund, the sooner you apply for this the better as you may need to wait a lot longer once we approach 31st October deadline due to the volumes of returns Revenue need to process.

5. Peace of mind

Being more organised and submitting your return early, gives you that peace of mind that you have completed your tax obligations and won’t have that rush in October.

Need to file your Income Tax Return and not sure where to start? Contact us now 01 539 7999
Why not read some of our previous blogs here

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More Homes to be liable for Local Property Tax

Further from our previous blog on the deferral of amendments to Local Property Tax (LPT) until 2021, Mr Paschal Donohoe is reported to have confirmed that there will be an expansion of properties subject to LPT over time, that won’t result in higher bills for those households that already pay it.

By expanding the numbers of households liable to pay LPT will reduce the need to impose higher property tax on existing LPT payers.

Mr Donohoe stated that;

Any changes have to be modest and affordable’, existing LPT payers ‘doesn’t see a change’. For some, if they do see a change, it’s a change by a single band

As reported in the Irish Independent,

The latest figures from Revenue suggest substantial compliance with the existing LPT regime, with 98pc of assessed households paying the tax in 2018. Revenue says it collected €482m in LPT last year. The owners of around 49,000 properties applied for exemptions citing a wide range of issues, ranging from pyrite damage to charitable use.

Why not catch up on our previous blogs here