A person who receives a gift or inheritance is required to submit a return to Revenue when the value of the gift or the inheritance is 80% or more of the tax-free threshold. The return must be filed and the tax liability paid by the 31 October following the valuation date, where the valuation date arises in the previous 12 months ending 31 August.
Non Resident Beneficiaries
We are commonly asked to advise on the tax obligations of non resident beneficiaries. There will be an exposure to Irish inheritance tax on any inheritance of Irish property. Where the property in question is not situate in Ireland there will still be an exposure if either the person leaving the benefit or the person receiving the benefit are resident in Ireland.
We can assist in filing tax returns and remitting tax liabilities for non resident beneficiaries. This can be particularly important in the case of non resident beneficiaries as secondary liabilities can arise for the executors in those instances.
We are also frequently asked to advise Irish beneficiaries on inheriting from UK Estates. Given the close socio economic ties between both jurisdiction, it is reasonably common for Irish resident beneficiaries to take from a UK Estate or indeed UK resident beneficiaries to take from an Irish Estate. There are significant difference between inheritance taxes in both jurisdictions that can result in no liability arising in one place while a large liability arises in the other at the same time, or indeed liabilities arising in both jurisdictions requiring some level of double tax relief.
We are perfectly placed to advise on the tax implications around inheritances of this nature.
You could potentially be regarded as not tax resident or not ordinarily tax resident in Ireland unless you have been tax resident for 5 consecutive years immediately preceding the year of the gift or inheritance if you are not Irish domiciled i.e. you were not born in Ireland.
Tax Issues for Beneficiaries
We are also well placed to advise beneficeieres on their tax obligations and how to meet them. There can be a level of complexity associated with this also.
- If I receive an inheritance, when do I pay the tax?
- I received an inheritance from an Estate in 2015 but the person died in 2013. Do I pay the rate in 2015, or the rate in 2013?
- What value do I pay tax upon, the value at date of death or the value now?
Efficient Administration for Probate purposes
An executor is obliged to manage the tax affairs of the Estate. This will involve filing tax returns to declare the income and expenses arising to an Estate, and pay any tax due, and also declare any gains arising on asset disposals that are undertaken by the Executors.
An executor will be required to file an Inland Revenue Affadavit to advise Revenue of all assets held in the Estate and liabilities arising.
We at Probate Professionals can arrange for the necessary compliance work to be carried out on your behalf. This will ensure that any secondary liability obligation that rest with Executor are managed.