Inheritance Tax at record high

by admin

Inheritance Tax at record high

by admin

by admin

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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