Ivan Yates
Question:58 Mr. Yates asked the Minister for Finance the proposals, if any, he has to change the provisions of the Probate Tax whereby those inheriting estates have to pay the tax in advance, before receiving their inheritance.
Written Answers. - Probate Tax.
The provisions in relation to payment of the probate tax are such that, where there are sufficient liquid assets in the deceased's estate to meet tax liability, the tax is required to be paid on delivery of the Inland Revenue Affidavit prior to the granting of probate or letters of administration. Interest on unpaid tax does not begin to accrue until nine months after the date of death and, where payment is made before this nine month period has elapsed, a discount of 1¼ per cent per month, or part of a month, is allowed.
Where the estate is predominantly made up of illiquid assets, or hardship arises, payment of the tax may be deferred by arrangement with the Revenue Commissioners until after probate or administration of the estate is granted. The terms of deferred payment will be determined by agreement with Revenue having regard to the particular circumstances of each case.
I am informed that the Revenue Commissioners process the Inland Revenue Affidavit within a matter of a few days. This allows the process of extracting a grant of probate to proceed quickly and thereby helps to keep to a minimum the cost of any short-term bridging finance required to pay the tax. Moreover, the early payment discount — which, for example, would amount to 7½ per cent of tax due where payment is made three and a half months after the date of death — should in most cases adequately compensate for the small interest cost of any such bridging finance.
While the operation of the probate tax will be kept under review, I do not have any plans to introduce changes in so far as the provisions relating to payment are concerned. I am satisfied that, having regard to the low rate of tax and the reliefs available, these provisions take due account of ability to pay and are reasonable in the circumstances. At the same time the payment provisions will facilitate efficient collection of the tax and will protect Exchequer yield.