Inheritance and Revenue implications

[NoMiddleName14]

My brother and I have inherited a property and a sum of money . We are the Executors of the will , sole beneficiaries and nephews of the deceased.

We have a solicitor who has applied for and granted Probate.

We have decided to sell the property and are in the process of obtaining an estate agent . With all the lockdowns and travel restrictions we were delayed starting everything.

Debts owed by the Estate will be to the Fair Deal Scheme , funeral expenses , solicitors fees , property tax , utility bills while the house was vacant and the short-fall between the FDS and the Nursing Home fees , all of which will be on Form SA2 that the solicitor would have filed.

I have been informed by Revenue that I am required to file a CAT return and pay any tax due by Oct 31th 2021.

I understand this can be done online on CAT IT38 or IT38S but as the house has not been sold yet I do not know proper value of it , also , will the debts listed above not have to be taken care of first and whatever is left is the figure that goes on the IT38 ?

What happens when Revenue send me a tax bill and I am unable to pay it as the house sale may not have gone through in time to meet the Oct deadline , I know there will be a sizeable tax bill as we are in Group B and the threshold is only €32,500 .

Would I be better off employing the services of an Accountant / Tax Consultant to help me fill the form out ? How much would I expect to pay for this service ?

A lot of questions there I know but any advise would be much appreciated.

Apologies if I have posted in the wrong forum - I wasn't sure if I should have put it in the Tax Forum.

Many thanks.

 

[homer911]

The beneficiaries have nothing to pay until the executor disburses the net estate. Note that the Estate Income Tax return (and any CGT return) must be done online and that requires a tax reference number. IT38 only needs to be filed by the beneficiaries when they receive a disbursement - personally I find the dates on these quite confusing so would recommend filing IT38 online where it at least gives you a clue if you enter the wrong date in the wrong field

 

[NoMiddleName14]

Many thanks for your reply , I understand the procedure now . Have to admit I panicked when I saw the letter from the Revenue regarding the tax deadline .....all I could see were the words "penalties" and "sanctions" for late payments.

 

[fistophobia]

R rule by threat.
Same letter received here, straight to trash.
CAT liability only occurs on distribution.

 

[MOB]

R rule by threat.
Same letter received here, straight to trash.
CAT liability only occurs on distribution.

Not wishing to be pedantic, but this is not universally the case. Valuation date is when an inheritance can be said to be "retained for the benefit of" a beneficiary. This can be as soon as the grant of probate. Strictly, it could be sooner, but in practice grant of probate is commonly taken.