Disclaiming an Inheritance

[Curious10]

Hello

Would anyone know if there is a time limit on disclaiming an inheritance.
In my case I inherited a 1/5 share of my parents home, value of my share approx 70k, 4.5 years ago.

A grant of probate was issued about 3 years ago, but the executors have not yet transferred the ownership of the house into the names of the beneficiaries and the house remains in my parents names and remains vacant since my parents death.

I believe that I can disclaim my inheritance because I haven't actually accepted the inheritance or received any benefit from the inheritance, i.e. the ownership of the house has not been transferred into my name, is this correct?

If correct, what action do I need to take? e.g. send a disclaimer note to the executors.
What about the CA24 which was submitted to the probate office, would the executors need to resubmit the CA24 excluding me from the list of beneficiaries.

I do not want to disclaim in favour of any particular person, so i believe my share will just go back into the pot and be divided up among the other beneficiaries according to the rules of succession, is this correct?

There is a personal reason why I wish to disclaim, don't really want to go into that on the forum if thats ok.

 

[Curious10]

Hello

Anybody got any advice for me on this query.

Thanks

 

[noproblem]

I'm not a legal eagle but the below might help.

Introduction
Section 12 of the Capital Acquisitions Tax Consolidation Act 2003 deals with the effect and consequences of disclaimers of benefits.

The section only applies where the person who disclaims a benefit does not name another person who is to benefit. Where there is a pure disclaimer the general rules of law (Succession Act 1965) establish who is to benefit.

Disclaimers - 10 Points to Remember

1. Where a person disclaims a benefit they no longer have a liability to CAT in respect of that disclaimed benefit.
2. A disclaimer is not itself a disposition for CAT purposes.
3. A person can disclaim for consideration. Any consideration is a benefit moving from the original disponer to the person disclaiming (i.e. a substituted gift or inheritance).
4. A disclaimer in favour of a named person is considered as an acquisition and a subsequent disposal and therefore there is a double charge to CAT.
5. A disclaimed legacy falls into residue.
6. If a residuary legatee disclaims, the residue is distributed as if there was an intestacy as regards the residue.
7. A share of the residue may be disclaimed. That share is then distributed as on intestacy. A person who therefore inherits a half-share of the residue can disclaim that half-share.
8. A person cannot partially disclaim the residue or partially disclaim a share of the residue.
9. A person may however disclaim one of several legacies, either pecuniary or specific.
10. If a life interest or other limited interest is disclaimed the remainder interest falls in immediately.

Some Examples
Example 1:

John dies testate on 10 January 2008. He leaves a pecuniary legacy of €60,000 to his brother Michael and the residue of his estate to his daughter Mary.

Michael, who is financially well off, decides to disclaim the legacy to him of €60,000.

The legacy falls into the residue of the estate and is inherited by Mary, together with the residue of the estate.

Michael has no liability to CAT as he has disclaimed the benefit to him.

Mary has inherited the entire estate from her father John and has taken no benefit from Michael.

Example 2:

Maureen dies testate and a widow in March 2008 and leaves the residue of her estate equally to her 3 children Noel, John and Mary.

Noel, who is living abroad, disclaims his one-third share of the residue under the will, which one-third share then passes by intestacy equally to the 3 children as to a one-ninth share each. If Noel also disclaims his one-ninth share of the residue passing under the partial intestacy, this one-ninth share then passes equally to John and Mary.

John and Mary each end up inheriting a half-share of the estate from Maureen.

Example 3:

Paula inherits a house under her aunt Nora’s will but disclaims the inheritance of the house in favour of her brother Tom.

As it is not possible to disclaim a benefit in favour of somebody else, this is an inheritance taken by Paula from Nora and then a separate gift of the house by Paula to Tom. Separate claims for both Inheritance Tax and Gift Tax accordingly arise in the situation.

Example 4:

Patrick dies and leaves his farm valued at €350,000 to his son Robert and the residue of his estate to his daughter Sheila.

Robert, who has no interest in farming, decides to disclaim the bequest of the farm to him in consideration of a payment to him of €250,000 from the estate.

Robert is treated as taking an inheritance of €250,000 from his father Patrick.

Sheila is treated as taking an inheritance from her father Patrick of the farm and the residue of the estate, less the €250,000 passing to Robert.

 

[Mags0709]

I think you will need to seek the advice of a solicitor as given the CA24 affidavit has been submitted and probate granted and self assessment deadlines past it is arguably too late to disclaim 3 years after the event?


Firstly I am assuming that the other beneficiaries were all your brothers and sisters i.e. they all inherited under the group A (parent to child) CAT threshold? Given the equal 70k euro share is well below the tax free amount I am assuming no one needed to do a self assessment return (by 31 August) and pay the CAT (by 31 October) in the year probate was granted? If not then there could be retrospective tax issues.


Secondly what is holding up the transfer? Is the property on the market to be sold – if not what are the intentions. Has it taken 3 years to sell it? Who has been paying the unoccupied house insurance and utility bills all these time? Have you taken any actions to progress the executor on this?


Of course if you gift your 70k share to the other beneficiaries now they would presumably be subject to the lower 30k euro Group B threshold – although 70k divided by 4 is well below this. Any disclaimer would need to be clear you aren’t disclaiming in favour. But this presumably could only be done once the property is sold.


So I think not – but you will need to seek legal advice and possibly tax advice as there may be CAT/gift tax implications. And make sure you get a solicitor who knows what they are doing – I was involved in a disclaimer situation and they made an initial hash of it.