Inheritance Tax Planning

Inheritance Tax – A tax (currently standing at 33%) that arises when an individual (the successor) receives assets by way of an inheritance due to someone passing away (the disponer).

Who pays the Inheritance Tax? It is the person receiving the inheritance or the gift (the successor/donee) who is liable for the tax, not the person providing the inheritance or gift (the disponer).

Tax-Free Thresholds – Beneficiaries can inherit assets that are exempt from inheritance tax. Tax-exemption thresholds are based on the group the beneficiary is in.

  • Group A:  The tax-free threshold is €320,000 if the beneficiary is a child or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take full and complete ownership of the inheritance from a child (not a gift).
  • Group B: The tax-free threshold is €32,500. This applies where the beneficiary is a brother/sister, a nephew/niece or grandchild.
  • Group C: The tax-free threshold is €16,250 and it applies in all other cases.

What is taxable? – Any asset (i.e. cash, land, investments, property, etc.) will be liable to inheritance tax if:

  • The asset is located in Ireland, or if the asset is located abroad and the disponer or the successor/donee is resident or ordinarily resident in Ireland.

Point to Note: Inherited Pensions are subject to tax at a rate of 30% and tax-free thresholds do not apply.

Inheritance Planning is important for everyone. If you are planning to leave assets after your death to certain people, some of the questions below may need to be considered.

  1. What should happen to the assets on your death?
  2. Do you want to save tax and avoid legal problems for the beneficiaries?
  3. Who are the beneficiaries: a spouse, a civil partner, children or a friend?
  4. How is your estate to be divided up?
  5. Have you made a will?

Covering the Inheritance Tax liability – Section 72 Whole of Life Insurance policy taken out by the insured person on his/her own life will be exempt from inheritance tax insofar as such proceeds are used to pay inheritance tax. Simply put, under section 72, the proceeds of a client’s life insurance policy are used to pay the inheritance tax that their family may incur from inheriting assets.

For further information, please contact us by phone on (074) 9121301, by email at or by contact form.