Due to rising property prices and recovering household wealth, Irish people paid a staggering €460 million in Capital Acquisition Tax in 2017. This is according to a Revenue publication ‘Profile and Distribution of Capital Taxes April 2018 Statistics & Economic Research Branch’.
When an asset passes from one person to another either by way of a gift or an inheritance it may be liable for the payment of Capital Acquisitions Tax (CAT). Assets passing between a spouse or civil partner are exempt from CAT. Outside of this, depending on the relationship between the person passing the asset and the person receiving the asset, you can receive a gift up to a certain threshold with the balance being taxed at a rate of 33% (correct as of July 2018).
When an asset passes from one person to another either by way of a gift or an inheritance it may be liable for the payment of Capital Acquisitions Tax (CAT). Assets passing between a spouse or civil partner are exempt from CAT. Outside of this, depending on the relationship between the person passing the asset and the person receiving the asset, you can receive a gift up to a certain threshold with the balance being taxed at a rate of 33% (correct as of July 2018).
There are small number of other reliefs and exemptions that apply to certain types of assets which have been introduced over the years primarily to encourage private enterprise and to avoid the forced sale of a family farm, business or family home in certain circumstances. These reliefs and exemptions are only granted once certain qualifying conditions are met.
Estate Planning is an important element of a Financial Plan but is something that we possibly forgot to consider since the last recession. The current Capital Acquisitions Tax rate of 33% combined with recovering household wealth might mean that a substantial percentage of your estate could be absorbed by taxes on your death. Thresholds, Reliefs and Exemptions if used properly can minimise the amount of tax payable and getting advice from Con Friel & Company can help you to ensure that the assets in your estate pass to your family in line with your wishes while minimising the amount of tax that needs to be paid in the process.
If you would like to review your options on Estate Planning, get in contact with Con Friel & Company on 074 9121301, by email confriel@eircom.net or by contact form.
