Inheritance Tax for Children Ireland
- Okay, hereS a breakdown of the key information from the article, focusing on Section 72 policies for inheritance tax in Ireland:
- * Inheritance Tax in Ireland: While property and asset values have increased, inheritance tax (Capital Acquisitions Tax - CAT) remains relatively low as a percentage of overall tax...
- In essence, a Section 72 policy is a way for parents to pre-fund their children's inheritance tax liability, potentially protecting family assets.
Okay, hereS a breakdown of the key information from the article, focusing on Section 72 policies for inheritance tax in Ireland:
Main Points:
* Inheritance Tax in Ireland: While property and asset values have increased, inheritance tax (Capital Acquisitions Tax – CAT) remains relatively low as a percentage of overall tax revenue (0.7% of Revenue’s tax take). It’s often perceived as a bigger issue than it is for most people.
* The Threshold: The current inheritance tax threshold is €3,000 for gifts and €192,400 for inheritances, and is still well below the threshold.
* Section 72 Policies: These are specifically designed to cover inheritance tax liabilities.
* Who Takes Out the Policy: Crucially, the policy must be taken out by the person leaving the estate (the parent), not the beneficiaries (the children). This can be a challenge for those with assets but limited cash flow.
* Who Can Pay Premiums: Children can contribute to the premiums, potentially using the €3,000 small gift exemption annually.
* Why use a Section 72 Policy? Notably useful for preserving assets like the family home, preventing it from being sold to cover tax.
* how it Works:
* The policy payout covers the inheritance tax bill.
* The payout itself is not considered part of the estate when calculating further tax.
* If the policy covers the bill exactly, great.
* If the bill is higher than the policy, beneficiaries pay the difference.
* If the bill is lower than the policy, the surplus becomes part of the estate.
* Coverage: The policy covers the entire inheritance tax bill for all beneficiaries, not individual amounts for each child.
* Providers: As of the article’s writing, only three companies offer these policies in Ireland: Zurich Life, Royal London, and Irish Life.
* Age Limit: Policies must be taken out before the age of 75, and some providers have even lower age limits.
In essence, a Section 72 policy is a way for parents to pre-fund their children’s inheritance tax liability, potentially protecting family assets.
Is there anything specific about this information you’d like me to elaborate on, or any particular question you have about Section 72 policies?