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|
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
An article issued on independent.ie highlights the details contained in a recent survey completed by Coyne Research.
‘The survey shows 84pc of people in Ireland don’t know the current inheritance tax rate, which could seriously affect inheritance for their family. ‘ It also highlights there is a widespread lack of awareness of the levels of inheritance tax that may have to be paid by families in the coming years, with 2/3rds unaware of the current thresholds.
The advice is for families with assets to get professional legal, tax and financial advice to put a plan in place, including a will, to ensure an estate is taken care of in a tax-efficient way.
Read more of this article here
Should you require any inheritance guidance or advice, please contact us on 01 539 7999 or firstname.lastname@example.org
In Monday’s Irish Times (14th May 2018), it was reported that new figures show inheritances and gifts worth over €1.4bn were subject to inheritance tax last year.
The Revenue Commissioners have released figures showing receipts for CAT (Capital Acquisition tax) rose to a record €460 million in 2017, showing an increase of 11% on 2016.
Read this article in full here