Am I Liable to Inheritance Tax?

I have researched this but am not sure how to proceed, any help would be greatly appreciated. The facts are as follows:

My Grandmother died intestate in 1982. Her son (my uncle) was living with her and he never did anything about the house being transferred into his name or to take out the Grant of Administration Intestate. He died January of this year, he made a will but it was a home-made will with many defects so to prove it with the Probate office will be difficult. He left in the will the house to myself. As no child of my Grandmother took out a Grant within the 12 year period required then the only person with an entitlement was my uncle based on the fact that he lived there for such a long length of time, ie squatters rights. My Aunt, ie the Uncle’s sister has agreed that she will take out a Grant in her Mother’s estate but she is statute barred from benefiting due to the passing of 12 years. She will however do the paperwork as she is next in the chain of entitlement to take out the grant. She will then Assent the house to my client, ie transfer it to him.

The house is worth €250k approx and I will have to obtain a 1982 valuation for the inland revenue affidavit but will I be benefiting in 2005. I will be in class B threshold, question, will the value of the house from 1982 be indexed in assessing my benefit obtained in 2005 which will effectively bring me over the threshold and make me liable to inheritance tax?

She will then Assent the house to my client, ie transfer it to him.

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Are you the beneficiary or the adviser?

I am the beneficiary but received a lot of the advice above from a solicitor

For capital acquisitions tax purposes- i.e inheritance tax, the valuation date is usually when the property passes to the beneficiary- this in normal circumstances is either the date of death or the date of the grant to the relevant estate. In the circumstances you have outlined, either a grant will be taken out to both your grandmothers and your uncles estate and an assent will be signed by your aunt ( in which case the valuation date is either that of your uncles death or the date of the grant to your uncles estate) or a grant will be taken out to your grandmothers estate only and a deed of family arrangement entered into, in which case the date of the grant or the deed will be the relevant date. Unfortunately you cannot cherrypick the 1982 date as the valuation date. However if you were living in the house for three years prior to the date of the gift, and continued to live there for 6 years, you would be exempt from CAT- so it may well be worth your while stalling on taking out a grant, depending on your circumstances and whether your aunt is likely to still be amenable to doing the paperwork in 3 years time, and how much tax you would be liable to now.

Hi Vanilla,

Thank you very much for the informative reply. It is much appreciated.

Regards,
InfoSeeker

Vanilla said:

However if you were living in the house for three years prior to the date of the gift, and continued to live there for 6 years, you would be exempt from CAT- so it may well be worth your while stalling on taking out a grant, depending on your circumstances and whether your aunt is likely to still be amenable to doing the paperwork in 3 years time, and how much tax you would be liable to now.

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Don't forget that one of the conditions for this relief to apply is that the recipient of the house must not at the date of the gift/inheritance be beneficially entitled to any other dwelling house or to any interest in any other dwelling house.

If you own, or have an interest in, another house this relief will not apply.