Charlie McConalogue
Ceist:78. Deputy Charlie McConalogue asked the Minister for Finance the status of an inheritance tax application by a person (details supplied); and if he will make a statement on the matter. [40392/18]
Amharc ar fhreagraThursday, 4 October 2018
Ceisteanna (78)
Freagraí scríofa
I am advised by Revenue that inheritance tax may be payable by a person who is resident or ordinarily resident in the Republic of Ireland 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 (i.e. the disponer). A double taxation treaty between both countries, as mentioned by the Deputy, provides for tax relief where a particular asset that is included in an inheritance is taxed in both countries. The relief operates by granting a credit against any Irish tax due of the amount of UK tax paid in respect of an asset (such as a property) which is situated in the UK.
For a credit to be granted under the treaty, there must first be an Irish inheritance tax liability. For inheritance tax purposes, the relationship between the disponer and the beneficiary determines the maximum tax-free amount known as the “Group threshold” below which inheritance tax does not arise. The Group B threshold (currently €32,500) is relevant in this case and applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer.
Any prior inheritance received by a beneficiary since 5 December 1991 from within the same Group threshold is aggregated for the purposes of determining whether any tax is payable on a benefit. Where a person receives an inheritance(s) that exceeds the relevant tax-free threshold, inheritance tax at a rate of 33% applies on the excess over the tax-free threshold.
From the information supplied by the Deputy it is not possible to be definitive as how the double taxation relief will apply in this case. As the Deputy will be aware, the Revenue Commissioners are independent in their dealings with the tax affairs of any individual and therefore the person should be advised to contact his or her local Revenue Office and outline the circumstances of the inheritance to ascertain how the credit system will operate in his or her particular case.