Capital Acquisitions Tax, Inheritance Tax and Gift Tax Ireland
If you receive a gift in Ireland it may be liable to tax. If you receive an inheritance in Ireland it may also be liable to tax. Both these taxes fall under the umbrella of Capital Acquisitions Tax.
As detailed below thresholds and exemptions do apply so it is important to always seek the advice of a tax professional. Contact Greavy & Co Accountants & Tax Advisors on (01) 604 0011 to speak with a tax professional now.
Inheritance tax is levied on the assets of someone who has died. The tax applies where money or other assets are passed on to a beneficiary, either via a will, via intestacy (where someone has died without making a will), or by the surviving owners of jointly-owned assets. The tax is charged at a rate of 33% on the remainder of all income received above the recipient’s tax-free threshold amount.
Inheritance tax is grouped alongside gift tax as a category of capital acquisitions tax. The tax applies to any assets that are located within Ireland, and also in cases where the property is located outside Ireland but either the deceased person or the beneficiary are resident or ordinarily resident in Ireland for tax purposes.
Inheritance tax is payable by the person who receives the inheritance. For the beneficiaries of the estate of a deceased person, they will become liable for inheritance tax if they receive sums in excess of the thresholds for capital acquisitions tax.
Any inheritance between spouses or civil partners is completely exempted from inheritance tax, regardless of the total value.
For all other beneficiaries, exemptions may apply in specific circumstances. These exemptions, including the tax-free allowance of individuals, will depend on the recipient’s relationship to the deceased person. The highest allowance is available to Group A beneficiaries, which includes the children (including adopted children, step-children and certain foster children) of the deceased, or a minor grandchild of the deceased if their parent is no longer alive.
For all inheritances with valuation dates within the twelve months ending 31 August, any applicable inheritance tax must be paid by 31 October of the same year. This means that you will have about 14 months to pay tax on inheritance valued on 1 September, but only two months to pay tax on inheritance valued just one day earlier.
Inheritance tax is declared as part of tax self assessment. For inheritance received on or after 14 June 2010, the return must be filed online via the ROS (Revenue’s online service). Alternatively, a tax advisor or accountant can assist in filing your return.
Form IT38 – Gifts/Inheritance Tax Self-Assessment Return is available from the Revenue.ie, or via your accountant.