Effective Ways of Reducing Inheritance Tax

Wills, Probate and Estate Planning

Effective Ways of Reducing Inheritance Tax

Capital Acquisitions Tax (CAT) is payable on a gift or inheritance received by a beneficiary from a “donor”. There are several ways donors can be efficient and help to reduce CAT payable by their beneficiaries.

The following are some ideas which can assist in this tax planning exercise:

  1. Transfer or hold property in joint names as property in joint tenancies can be passed, on the death of one of the parties, to the other party/ies named on title tax free;
  2. Make a will based on your wishes, but also based on the tax-free thresholds available to your beneficiaries in the will;
  3. Be generous to your other half in your will as assets of any kind can be passed tax free to your surviving husband, wife or civil partner;
  4. Know the criteria for the various CAT reliefs available and utilise them where applicable e.g. Agricultural, Business, Favourite Nephew/Niece, Dwelling-House Relief;
  5. Take out a Life Assurance Policy, known as a section 72 Policy, to cover the CAT payable by your beneficiaries;
  6. Consider setting up a Trust, particularly where the beneficiaries are minors;
  7. Cashable assets are very important as this helps beneficiaries pay off the CAT liability without needing to get loans etc.;
  8. Every year you can give a gift of €3,000 tax-free blood relation or not. This will decrease the CAT payable.

Copyright © McKeever Solicitors, 10 July 2017.

This article is a general review and is not intended to be a complete statement of the law. Specific legal advice must be sought in every case. For further information on Wills, Probate and Estate Planning, please contact Clodagh O’Hagan or Helen Sweeney.

Key Contacts

Clodagh O'Hagan
Solicitor

IFSC, Dublin
Clodagh maintains a broad private client practice and specialises in the areas of property and probate law.

T: +353 (0) 1 670 2990

F: +353 (0) 1 670 2990

E: cohagan@mckr.ie

Helen Sweeney
Solicitor

IFSC, Dublin
Helen has a wide range of experience in the sale, purchase, acquisition and disposal of commercial and residential property.

T: +353 (0) 1 670 2990

F: +353 (0) 1 670 2988

E: hsweeney@mckr.ie