What do I do if I receive an inheritance?
The Irish tax system operates on a self-assessment basis. You are obliged to file an inheritance tax return self-declaring the assets inherited. You should identify in this disclosure whether you are entitled to receive any element of the inheritance tax free, using the applicable class threshold. The inheritance may also be reduced by costs liabilities and expenses incurred in order to take the inheritance. Tax is charged at 33% presently (January 2016).
We routinely review a clients existing Will to estimate the Capital Acquisitions Tax liability that will arise on death. We can then make suggestions on how the terms of the will should be amended to reduce the liability arising in the future.
We will occasionally use some of the tax reliefs within tax law to reduce those future liabilities.
Capital Acquisitions Tax reliefs include:
- Dwelling House Relief
- Agricultural Relief
- Business Assets Relief
- Small Gift Exemption
- Inter Spousal Transfers
- Same Event Relief
It may also be necessary to consider Capital Gains Tax (CGT) exposures if one is considering lifetime transfers. We will consider some CGT reliefs to try and reduce or eliminate those liabilities.