Dáil Éireann debate -
Wednesday, 4 Nov 1998

Vol. 496 No. 1

Written Answers. - Inheritance Tax.

Noel Ahern

Question:

165 Mr. N. Ahern asked the Minister for Finance the scale for probate tax and inheritance tax which may apply in a case of a house jointly owned by three members of a family in equal shares where the two unmarried siblings have died during 1998, the house automatically goes to the only surviving member who has not lived there recently and the value of the house is £115,000. [22179/98]

Minister for Finance (Mr. McCreevy)

Probate tax is charged at a rate of 2 per cent on the net value of non-exempt assets left by a deceased, whether the assets pass under a will or intestacy. Property not passing under a will or intestacy, for example, jointly held property is not within the scope of probate tax.

Based on the information outlined above and assuming that the individuals involved did not take any other gifts or inheritances since 2 June 1982, the following is the position with regard to inheritance tax. Inheritances or gifts taken from a sibling can avail of the Class 11 threshold of £25,120. On the death of the first sibling the two surviving siblings each inherited a one sixth share of the house by survivorship, worth £19,167. Consequently, no inheritance tax would have been due in respect of this inheritance.

On the death of the second sibling, the surviving sibling at that stage inherits a half share of the house by survivorship. The half share is worth £57,500. The surviving sibling is liable to inheritance tax on the aggregate of the first and second inheritances with credit given for any tax already paid.

The tax on the inheritance of £76,667 is calculated as follows:

	Tax due
	£
Threshold amount (£25,120)	Nil
Next £10,000 @ 20 per cent	2,000
Next £30,000 @ 30 per cent	9,000
Balance @ 40 per cent (£11,547)	4,619
Total Inheritance Tax	15,619

As I stated earlier, this calculation assumes that the successor has received no other taxable gifts or inheritances since 2 June 1982.

In the case outlined above the surviving sibling would not benefit from the elderly sibling relief, as the surviving sibling had not resided in the house with the other two now deceased siblings for the required five year period prior to the inheritance.