There are two certainties in life, death and taxes. Ironically, in Ireland for the future the latter is relying on the former to increase the tax take under this tax head.
So now is the time for planning in relation to this.
The Problem
Revenue reported that, in 2012, €280 million was paid in Capital Acquisitions Tax; in excess of €933 million worth of assets are declaring and paying Gift and Inheritance Tax on.
The taxation double whammy:
Tax rate: The rate of Capital Acquisitions Tax, both for gifts and inheritances, increased from 20% in 2008 to 33% in 2013.
Tax-free thresholds: Thresholds have been dramatically reduced. For example, the group 1 threshold from parents to children reduced from €521,208 in 2008 to €225,000 in 2013.
Example
Mr. & Mrs. Kelly are aged 55 and their estate, valued at €3,000,000, is to be divided equally between their three children. Their children’s inheritance tax bill will be €767,250 – i.e. 25% of the estate will be taken in tax.
If you have any queries, OMB, Chartered Accountants would be happy to discuss this article relevant to your situation.
