Thursday, March 21, 2019

Will my family have to pay Inheritance Tax?

Inheritance Tax is calculated as at date of death rates  for gifts and inheritances  the current rate is 33%.

Spouses are exempt from Inheritance Tax. Sons/daughters (to include adopted and step sons/daughters) and parents who take absolute interest from a child and foster sons/daughter (who fill a certain criteria) are entitled to inherit  €225,000 each before the  inheritance tax rate sets in.

Parents/brothers/sisters/nieces/nephews/grandchildren and grandparents are entitled to inherit €30,150 before the inheritance tax rate sets in and anyone else has an inheritance tax free allowance of €15,075. 

However, if you inherited from a same class person since 5th December 1991 to date, that inheritance will be added to your current inheritance for the purpose of calculating the tax due. For example; if in May 2002 you inherited €300,000 from your father and then in 2013 you inherited €250,000 from your mother, the two amounts are added together giving you a total inheritance of €550,000 from a same class person and you would be liable to pay 33% inheritance tax on the difference between €550,000 and the threshold of €225,000. However, expenses such as the funeral bill, funeral reception, headstone and memorial cards can be offset against the inheritance tax liability.

I never married my partner and we have children. He has left everything to me in his will. Will I have to pay Inheritance Tax?

Yes, you will have to pay inheritance tax of 33% on everything in excess of €15,075. If the house you live in is in your joint names this will pass to you automatically outside of the Will but you will still have to pay inheritance tax on the value of the half share which you inherit unless you have lived in the house for three years prior to your partner's death and continue to live in the house for six years after the death and own or have no interest in another dwelling house (a dwelling house is any building or part of a building used or suitable for use as a dwelling). If it is in your partner's sole name you may be exempt from paying inheritance tax on it if you lived in it with your partner for three years before his death and continue to live in it for six years after his death and you own or have an interest in no other dwelling house in your own right. This does not apply if you are over 55 years at the date of death, if you are over 55 you are automatically exempt.

Dermot McNamara BCL,
Notary Public
Commissioner for Oaths

Collette Bryson BA (Hons)

Frances Cunneen T.E.P. Trust & Estate Practitioner

Lorraine Byrne

M.I.I.L.Ex, Legal Executive

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