It seems that there have been better times to come in to an inheritance, particularly one from other than a parent. More and more people who inherited from other than an immediate relative and who waited to sell will see more of their equity wiped out.
Soon some sales wont realise the tax due on the inheritance. This is one cohort of people who will have to sell. As a guy who used to do structural surveys on a lot of homes in south Dublin it was usual that one in five sales was an executor sale.
There wont be much hanging around for a sale with these homes any longer, as it will be difficult for many to raise finance to buy out other siblings or near relatives.
I know of one case where an nephew inherited from his uncle who in turn had inherited a year earlier as a nephew. Effectively the tax man gets all.
Gift tax rates and Inheritance tax rates and thresholds are bound to be reviewed to yield more revenue as property prices and yields fall.
Beneficiaries are a relatively small group for any government to target.
And generally they didn’t do anything to deserve it apart from outlive the deceased so the pleas will be muted!
The thresholds were reduced with effect from last April (parent to child €542k to €434k for example). Inheritance tax was increased to 25% (from 20%) in two stages also with effect from April.
I understand that gifts pre-death are considered as part of the estate at death if they are in the preceding ten (?) years.
If a gift is made at a time of one tax rate and allowance and then the death occurs when the allowance is smaller or the tax rate higher, is it taxed at time of death?
Not that it affects me! It just seems a little inequitable…
I think you’re overstating the issue. There is a sliding scale of inheritance relief depending on the degree of consanguinity (I’ve been waiting a while to use that word ), and in any case, most inheritances are to direct offspring. If anything, the falls in property prices greatly outweigh the cuts in inheritance reliefs, so now it’s far more likely that no tax will be due unlike in the boom.
Inheritance taxes are a very sensitive political issue, they antagonise the old folks and their offspring in equal measure. There’s precious little to gain in terms of tax take when so few houses are being sold, so why would Lenny make a rod for his own back?
In Ireland the tax exempt limits are lifetime limits. You can get a max in gifts/inheitances of xxxk from parents, etc, and consanguinity affects the limit. Over that its taxable at 25% currently.Capital Aquistions Tax (CAT) Period. The UK has a 7 year rule if that its passed to you 7 years in advance of death no IHT arises. The Daily Telegraph and Sunday Telegraph readers take up most of its personal finace problem pages with this rule, so guess the average age of its readers.
), and in any case, most inheritances are to direct offspring. If anything, the falls in property prices greatly outweigh the cuts in inheritance reliefs, so now it’s far more likely that no tax will be due unlike in the boom.