Dáil Éireann Debate, Tuesday - 21 November 2017
165. Deputy Michael McGrath asked the Minister for Finance the position in circumstances when the payment of inheritance tax becomes due by a person living here who is benefitting from an inheritance in respect of the estate of a person in the UK; if his attention has been drawn to the fact that in some cases the tax falls due before the deceased's estate has been administered; and if he will make a statement on the matter. [49364/17]
Amharc ar fhreagraI am advised by Revenue that inheritance tax may be payable by a person who is resident or ordinarily resident in the State where the person (i.e. the beneficiary) receives an inheritance from the estate of a deceased person living in the UK. Double taxation can potentially arise because Irish inheritance tax is based on the country of residence of the beneficiary while UK inheritance tax is based on the country of domicile of the deceased person. A double taxation treaty between both countries provides for tax relief where a particular asset, such as property, that is included in an inheritance is taxed in both countries. The relief operates by granting a credit against any Irish tax due in the amount of UK tax paid respect of the asset in question.
The date on which inheritance tax falls due is determined by the ‘valuation date’ on which the market value of the assets and property included in an inheritance is established. Where this date is between 1 January and 31 August, inheritance tax must be paid by 31 October in the same year. Where this date is between 1 September and 31 December, inheritance must be paid by 31 October in the following year.
Section 30 of the Capital Acquisitions Tax Consolidation Act 2003 contains the rules for determining the valuation date. The valuation date depends on the particular circumstances of a case and is not a fixed date in relation to all inheritances. It can be the date on which the assets and property included in an inheritance are given to a beneficiary or such earlier date on which the executors of the will become entitled to retain the assets or property for the benefit of a beneficiary. Generally the executors are entitled to retain the property for the benefit of the beneficiary on the date on which probate or administration is granted. Where there is delay in completing the administration of the estate after that date it may happen that inheritance tax falls due for payment before that administration is complete.
The establishment of the valuation date depends on the particular facts and circumstances of an inheritance and the administration of a deceased person’s estate. If a beneficiary who is resident in the State is uncertain about the appropriate valuation date to use in relation to the payment of a potential inheritance tax liability, the beneficiary may wish to contact his or her local tax office. On receipt of full details in relation to the case, a determination of the valuation date can then be provided by Revenue.
