Credit union nominee and CAT/inheritance tax

F

Forest

Registered User
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I read that anything under 23k that is paid to a nominee upon death passes outside of the will/estate. In my case the amount will be 10k.

My question is if somebody has already exceeded their CAT allowance with the remainder of the inheritance/estate is there a self declared CAT of 30% due on the 10k? Or does the fact that it is a death benefit from the credit union mean that it is exempt from CAT.

Some credit unions state in their literature state that it is exempt from inheritance tax but I cannot find anything on revenue that confirms this. The forms for probate include credit union accounts.

Can anyone point me in the right direction? The credit union act 1997 really only covers access to the money (outside of the will/estate) as opposed to tax requirements.

Many thanks
 
I got advice from this from the Revenue this morning. The nominated amount does pass outside of the will and estate but the CAT thresholds still apply.

If you have exceeded the CAT group threshold then the full amount of the credit union nomination is taxable at 30%.
 
So would I be right in thinking that the beneficiary of the nomination would have to declare that 23K or whatever lesser figure in their CAT return?
 
I have been advised that the death insurance element of the credit union final figure is not taxable. The amount that the deceased left in the credit union still has to be detailed for probate in the revenue affidavit.

If you have not already exceeded your group CAT allowance then once the credit union figure is under 23k then there is no tax due.

That's as I understand it after talking to revenue and the credit union.
 
Meath Lady said:
Hi Forest,

Could you please explain what you mean by the death insurance element . Thanks
Click to expand...

As you were not answered, I will stick my nose in. The 'free' insurance offered by many credit unions is divided into three, each payable on death and, in some cases, permanent/serious illness: Loan insurance - usually wipes out the loan outstanding: Savings insurance - will increase savings up to a maximum of 100% and/or about €13-14k(other conditions apply such as age when the savings are accrued): Death Benefit Insurance - this is a lump sum, €1,300 in our CU, paid on death. It is this last one that is excluded from the inheritance tax.
 
CU nominee queries

Where does the 23k nominee figure come from?

There is £10k mentioned in section 21/3. Which is it?

I may be a nominee on a deceased person's CU account (I don't actually know) but when the CU is provided with a Death Cert I presume that the CU writes to the nominee?

Are any accounts nominated outside of the will?

(3) For the purpose of the disposal of any property which is the subject of a nomination under subsection (1), if at the date of the nominator's death the amount of his property in the credit union comprised in the nomination exceeds £10,000, the nomination shall be valid to the extent of £10,000 but not further or otherwise.

http://www.irishstatutebook.ie/1997/en/act/pub/0015/sec0021.html
 
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