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Inheritance Tax Planning in Ireland

In Ireland, inheritance tax is also known as Capital Acquisitions Tax (CAT). It is a tax levied on gifts and inheritances received by an individual. The current CAT rate is 33%, and it applies to the value of the gift or inheritance received after certain exemptions and thresholds have been applied.

Inheritance Tax

To plan for inheritance tax in Ireland, here are some steps that can be taken:

  1. Understand the tax threshold
    In Ireland, there is a tax-free threshold for gifts and inheritances received from parents, grandparents, and children. The current threshold for gifts and inheritances from parents to children is €335,000. Any amount above this threshold will be subject to CAT at the rate of 33%.
  2. Make lifetime gifts:
    One way to reduce the amount of inheritance tax payable is by making lifetime gifts. These gifts are subject to CAT, but they can be more tax-efficient than leaving everything to be inherited after death. Lifetime gifts can be made up to the tax-free threshold without incurring CAT. However, if the total value of the gifts exceeds the threshold, the excess will be subject to CAT.
  3. Consider tax reliefs:
    In Ireland, there are certain tax reliefs available for certain types of gifts and inheritances, such as agricultural property and business property. These reliefs can help to reduce the amount of inheritance tax payable.
  4. Make use of annual exemptions:
    In Ireland, you can give gifts of up to €3,000 per year to anyone tax-free. This is a useful way to reduce the value of your estate over time.
  5. Consider trusts: Placing assets into a trust can help to reduce the amount of CAT payable on those assets. However, this can be a complex area, and it's important to seek professional advice before setting up a trust.
  6. Make a will: Having a will can help to ensure that your assets are distributed according to your wishes and can also help to minimize the amount of inheritance tax payable.
  7. Seek professional advice: Inheritance tax planning can be complex, so it is advisable to seek professional advice from a tax advisor or solicitor who specializes in this area.They can help to create a tax-efficient plan that meets your individual needs and circumstances.

It's important to note that the above steps are general guidelines and may not be applicable in all situations.

If you have any questions about Inheritance Tax please contact our experienced team today. We'd be happy to provide tailored advice and assistance based on your individual circumstances.

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