CAT bill for grandchild

3

3littlefish

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If I leave an inheritance to my grandchild, that exceeds the Group B threshold who is liable to pay that tax? Will I accidentially leave my child (i.e. my grandchild's parent) a debt?
 
I would think that the grandchild's parent could pay the CAT liability out of the proceeds of near 90,000?

Not from a legal background but am not sure if a minor can inherit such a sum and that this might need to be placed on trust till they reached a specific age; this is only conjecture on my part.
 
Yes, I would place it in trust, but that would not leave my child any cash to meet the CAT liability for my grandchildren.
 
I think you would just need to give the trustee power to settle any tax bills.
 
Yes but settle it out of what money?
Unless you have a section 60 (or whatever it is now called) policy specifically to cover CAT, what money is used to pay the CAT? And if it is not a S60 policy, surely the money used to settle CAT if it comes from my estate would itself be liable for CAT in the hands of whosever initial CAT bill it was used to settle...if you know what I mean?

I'm afraid I am no closer to an answer that I understand.
 
Reading again I see you refer initially to an inheritance worth E100K, from your last post I assume its not cash then?
 
One way no minimise the CAT liability would be to give your grandchild 3,000 euro per annum, either in cash or stock. Your grandchild has an annual CAT small gift exemption of 3,000 per annum. You could open a bank account for him/her and put the money into it each year. If you live another ten years, that would mean the child will get 30,000.

Then, in your will you could leave the child the balence. If you give the child 30,000 in this way, and the remaining 70,000 in your will, the child will only pay CAT on the 70,000 minus the CAP group B threshold.

Do not put any monies into trust until you get legal advise. Trusts also subject to taxes.
 
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