How to pay Inheritance tax when cash poor?

M

malzeit

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My parents have died in quick succession. I will have a liabilty of circa €400k on my Dad's estate. He died during the middle of last year and probate will be coming through in the next month or so.

The estate is asset rich so the house will have to be sold to pay my tax liability. Can't rent out house to access income as it is a large city centre (not in Dublin..if only!) victorian mansion which is not centrally heated.

The sting is that I am on a career break. I cannot return to my job because my young child needs daily physio/occupational therapy which I have built into the routine. My husband thankfully has the income to afford for me to stay at home, run two houses and cover the cost of the executor's loan which we had to take out in order to tidy up the closure of family business.

What happens now with the Revenue Commissioners? How do people arrange to pay their tax bills in situations like this, especially if it takes a year to sell the house?

Regards
Malzeit
 
I haven't checked this out, but I believe that if a property has to be sold to pay the tax, the tax can be deferred for up to 1 year.

You will need to get confirmation of this though.
 
Given the sums involved, you should get professional advice which is specific to your circumstances. Is the administration of the estate being handled by a solicitor? Has he\she advised on the appropriate valuation date(s) for inheritance tax returns? If your solicitor is out of his\her depth (some solicitors are - but most solicitors with any substantial probate practice would have good expertise in this area) ask that specialist tax advice be taken.
 
Thank you for your replies.

Yes an experienced solicitor is handling the administration of the estate. He has said not to worry it will be sorted out.

My concern is that I am being handled with kid gloves. He was my Dad's solicitor and has been very protective. I like to know the facts up front and tackle them head on!

Good point about the tax specialist. My father in law mentioned that the tax liability maybe deferred.
 
OP - why don't you have a look on the revenue.ie website it has loads of information and I'm sure you will find what you are looking for there.
 
Thanks but been there done that! Emphasis of their information is weighted towards calculation rather than payment.
 
Bronte said:
OP - why don't you have a look on the revenue.ie website it has loads of information and I'm sure you will find what you are looking for there.
Click to expand...

malzeit said:
Thanks but been there done that! Emphasis of their information is weighted towards calculation rather than payment.
Click to expand...

Revenue are not in the business of giving advice to taxpayers on how they should best arrange their tax affairs.
 
I had a CAT query and called directly into the Revenue's CAT office off O'Connell Street. They have a helpdesk there and should be able to answer basic questions you have.
 
Yes Revenue are not tax advisors but they can point someone in the right direction........ I mean part of their job is to help the public surely? (I've always found them to be most helpful - once I got the correct expert the particular area).
 
Yes but, (to repeat)

"Revenue are not in the business of giving advice to taxpayers on how they should best arrange their tax affairs."
 
ubiquitous said:
Yes but, (to repeat)

"Revenue are not in the business of giving advice to taxpayers on how they should best arrange their tax affairs."
Click to expand...

Indeed...but they do say themselves

"You can expect
  • to be given the necessary information and all reasonable assistance to enable you to clearly understand and meet your tax and customs obligations and to claim your entitlements and credits. www.revenue.ie"
 
OP - your solicitor will normally have a contact in revenue due to the ongoing process that is probate in this country.So long as you keep them up to speed then you may be able to negotiate a deferred or staggered settlement process.Main thing is to be upfront with them at all times. Personally I would be hands on and not leaving all to solicitor but thats just me.

regards

Westgolf
 
This is not a suitable forum for detailed case-specific CAT advice. But, having said that:

1. "My father in law mentioned that the tax liability maybe deferred" I rather suspect that the father in law was reading something on the grant of probate, being a few words which are part of the standard 'boilerplate' text, but which have very little meaning today.

2. You can opt to pay CAT in instalments. It is a bad option, almost never used.

3. The real issue here is the valuation date. Tax is due four months after the valuation date. The valuation date might be the date of death. It might be the date of the grant of probate. It might be a later date when estate liabilities have all been ascertained and paid, and the balance accruing to the beneficiary(ies) ascertained.

A competent solicitor will ensure that your tax is discharged within 4 months of the valuation date, unless the circumstances make this impossible. Just ask the solicitor to confirm this in writing if you are at all unsure. A competent solicitor will have no difficulty in giving such a written assurance.
 
Again, thank you for your replies! Westgolf I'm especially on the same hymn sheet as you.

MOB I only posted this question because I felt it was a relevant & realistic query reflecting the implications of the current slowdown in the housing market.

Apologies to the forum for being too detailed. I felt that the amount of liability hits at the heart of the matter.

I just wanted to get a feel for the current situation prior to my next appointment with the solicitor and contact with the Revenue Commissioners.

Onwards and upwards!
 
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