These are some of the highlights from an article entitles “Families should be allowed to pay death tax in stages” on 8 June 2015 on inheritance tax, headlining in the Irish Independent, Monday 8th June 2015.

 Experts say the system is one of the toughest inheritance tax regimes in the world. The reduction in the tax-free thresholds has resulted in even modest properties being hit with big tax bills when transferred from parents to offspring”.

Leaving assets to children through a Will, can often trigger a liability to Capital Acquisitions Tax (CAT). In recent years, the CAT thresholds between parents and children have decreased dramatically and the tax rate has increased to 33%. This means more and more people have been dragged into the inheritance tax net, probably being unaware of it.

Your loved ones, may be faced with two choices in order to meet any CAT liability on your estate – either dip into their own resources or sell part of their inheritance. Having to sell part of their inheritance to meet the tax liability may be a very hard choice to face, especially going through the very difficult period following the death of a parent. It is obvious from this article that selling the family home what a lot of people are being forced into doing today.

The Problem

Revenue reported that, in 2011, €244million was paid in Capital Acquisitions Tax; in excess of €976 million worth of assets which your clients are declaring and paying Gift and Inheritance Tax on.

For Example
Mr and Mrs Kelly are aged 55 and their estate, valued at €3,000,000, is to be divided equally between their three children. Their children’s inheritance tax bill will be €767,250 - i.e. 25% of the estate will be taken in tax.


The Solution

You can alleviate a loved one’s liability to inheritance tax. By effecting a Section 72 life assurance policy, you will continue, unhindered by death, to protect loved ones by providing a cash sum which will fund the CAT liability arising on the benefit they inherit from your estate.

Use a Life Long Insurance plan with life cover of €767,250 to pay the tax bill. The premium (exclusive of the government levy) is €8,729.12 per annum.

So the options are:

  • lose up to 25% of the estate in inheritance tax;

  • save €8,729.12 per annum for over 80 years to save €767,250 or;

  • put life cover in place to protect the estate at a cost of 1.25% of the tax bill using a Life Long Insurance plan.



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