Where a gift is left to a person under the will of a deceased person, certain taxes may be payable by the beneficiary. This tax is called Capital Acquisitions Tax or Inheritance Tax. The person who receives the inheritance is the person liable for the payment of inheritance tax.
Certain persons and bodies are exempt from Inheritance tax, in particular:
· The spouse of the person making the Will
· Charities, which are registered with the Revenue Commissioners.
Accordingly, a bequest left to a spouse or to certain charities is payable in full without the deduction of inheritance tax.
For gifts to other persons, certain tax thresholds or tax-free allowances apply. Inheritance Tax only becomes payable if the amount received by the beneficiary exceeds the relevant tax-free threshold. The threshold, which applies, depends on the relationship of the beneficiary to the deceased person.
In addition, some exemptions and reliefs from Inheritance Tax are available to particular categories of beneficiaries. For example certain dwellinghouses may be taken tax-free and farm property may benefit from a substantial relief from inheritance taxes in particular cases.
The relevant tax free thresholds, reliefs and exemptions change frequently. It is therefore necessary that you consult your solicitor on these matters when making a will or when taking a benefit from a deceased person.
Mulroy and Company Solicitors Galway will be happy to advise you in respect of all inheritance tax matters. Principal of the firm Martin Mulroy is a Member of the Institute of Taxation in Ireland and is therefore well placed to give advice on inheritance and other tax issues.
Any questions on the above? Please contact Mulroy & Company Solicitors Galway.