CAT on Income Protection

[frankfred]

Hi,

My late father had an income protection policy which paid a lump sum on his accidental death.
I'm getting conflicting opinions on the CAT liability. From the Capital Acquisitions Tax Consolidation Act, it mentions damages and compensation as being exempt. Surely this would be compensation arising from death, and therefore exempt?

Thanks,
F


2.—(1) The following are not gifts or inheritances:

(a) the receipt by a person of any sum bona fide by means of compensation or damages for any wrong or injury suffered by that person in that person's person, property, reputation or means of livelihood;

(b) the receipt by a person of any sum bona fide by means of compensation or damages for any wrong or injury resulting in the death of any other person;

 

[Thirsty]

Very sorry for your loss.

You say your father's death was accidental. You need to check if the income protection policy had a life assurance element which would have paid out regardless of your father's mode of death; if that is the case then I don't think you can claim this was compensation/damages.

If however your late father was (for example) killed in a workplace accident and compensation was paid by the employer on foot of that, then I think you could claim that was compensation/damages.

Revenue are very good, if you get to talk to the right person, worth giving them a call

 

[frankfred]

Thanks Thirsty!

No, this policy definitely only paid benefit in the event of accidental death. They dragged their heels for two years on that point (traffic accident, coroners reports etc.)

Thanks again,
F

 

[Joe_90]

I'd have thought that the proceeds of a policy held by your father would be paid into his estate.

I don't think that the proceeds of this type of policy falls within the exemptions that you talk about.