Any experts have an idea of what inheritance tax would be due

[rennie]

I was wondering if any experts could give me an idea of the amount of inheritance tax that would be owed on a property of 300k plus money of 100k given to a child by a parent?

Myself and my husband currently rent a tiny apartment but basically stay fulltime in my father's house caring for him as he is completely incapacitated. We would love to move down to the country as my husband trains and sells horses, and it is costing us more money to stable them in Dublin than to have a field down the country. We would also be happier living down there. We would bring our father down to live with us and continue his care down there.

As myself and my husband have cared for mum (who passed), and now my dad, we have never had a mortgage of our own, we just ended up living back in their house, with me doing full-time care. My dad is saying we are mad to get a mortgage when he is leaving us his house in his will. He says since its our primary residence we won't pay inheritance tax on it? Is this correct?

He says he is leaving us the house (300k roughly) plus 100k in cash and says we will have to pay a fortune in tax on it if its not our primary residence. He is really careful with money and thinks it would be mad for us to pay it unnecessarily. I should state he has no issue with moving down the country with us, and would love it - it's purely a practical money issue. The thing is I don't want to discuss it with him as I think its horrible, but I have no idea if he means we would pay 10k or 100k in taxes. If it was below a certain amount we wouldn't mind sacrificing it to move. But if it was a crazy amount we would stay put.

It would be great if someone could give us a rough idea how much tax we would pay on the inheritance? Thanks for reading this far!

 

[huskerdu]

I am not an expert, but here is some of the basic information on Capital Acquisitions Tax that should be useful to you.

http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html

Currently, Your husband can inherit 250k from him father with no CAT.

After that, the CAT rate is 30% (Both the rate and excemption level can be changed in the budget any year).

As your Father in Law has pointed out, if you inherit a house you live in, you might be excempt from CAT. There is a link to the Revenue leaflet about this in the page above.

If you do not get this excemption, and your husband inherits an estate worth 400k this year, the simple calculation of CAT would be

(400K - 250k )* 30% = 45k.

 

[rennie]

Thank you so much for that. that's exactly what I was looking for. Much appreciated