Q&A: Depending on timing two different people can end up paying different amounts of tax on the same amount of an inheritance or gift
Depending on timing two different people can end up paying different amounts of tax on the same amount of an inheritance or gift
Can you tell me please what the position would be where one parent dies while the threshold is €335,000 and leaves part of their estate to a child, the value of which exceeds the threshold, but the other parent dies in a year when the threshold is higher, say €400,000, and they leave the balance of the estate to the child on their death when the threshold is higher?
In a few years’ time, when for argument’s sake the threshold has risen to €400,000, your mother dies, leaving you an inheritance of €80,000. This brings you over the old threshold but you remain under the new threshold now in place, so no tax applies.2. Your dad dies when the threshold is €335,000, leaving you an inheritance worth €370,000.
No allowance is made for the fact that you previous paid tax on some of your father’s inheritance that would now be below the new threshold. So, between the two inheritances you will pay tax of €67,650 while another person who received identical inheritances but got both at a time when the threshold was at the higher €400,000 rate will have a lower tax bill, just the €56,100.I read your article with interest – especially in relation to dwelling home exemption.
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