inheritance issue?

answers please if you can help.

if two cohabiting(non married) people jointly own a house. one of them dies and wills their share to the remaining partner, does that living partner have to pay some form of inheritance tax on the inherited share of the property?.

i know in a husband and wife type situation, inheritance does not arise, in the cohabiting(long term), is it a different story?.

It depends on who owns the house and in what way. If they own the house jointly, I believe it can be owned on the basis that if one of the partners dies the house automaticly passes to the other. I believe this does not count as an inheritance.

terrysgirl33 said:

It depends on who owns the house and in what way. If they own the house jointly, I believe it can be owned on the basis that if one of the partners dies the house automaticly passes to the other. I believe this does not count as an inheritance.

Click to expand...

Not true. It is an inheritance. It may be that the survivor can avail of a relief where they have lived in the property and it is their only property. If there is other property, the relief will not apply. And inheritance tax ( CAT) will be payable.

mf

thanks for clarifying mf1....i assume the tax is applied to half the property, not all...do you happen to know what is the applied rate of inheritance tax.

also leaving aside property, in a cohabiting situation, if the deceased partner wills say a lump sum to the other half does this become liable for inheritance tax?

i just thought there may be some recent tinkering in the law in this area, given the rise in cohabiting same sex couples for instance.

This is the wording from Revenue:

GIFT/INHERITANCE CAT 10
TAX EXEMPTION FOR DWELLING HOUSE
INTRODUCTION
Section 86 of the Capital Acquisitions Tax Consolidation Act 2003 provides that gifts or inheritances of a dwelling- house taken on or after 1 December 1999 will be exempt from capital acquisitions tax provided the following conditions are complied with -
a) The recipient must have occupied the dwelling- house continuously as his/her only/main residence for a period of 3 years immediately prior to the date of the gift/inheritance. Where the dwelling- house has directly/indirectly replaced other property owned by the disponer, this condition may be satisfied where the recipient has continuously occupied both properties as his/her only/main residence for a total period of 3 out of the 4 years immediately prior to the date of the gift/inheritance;
b) The recipient must not, at the date of the gift/inheritance, be beneficially entitled to any other dwelling- house or to any interest in any other dwelling- house
c) Gifts taken on or after 20 February 2007: Any period during which a donee occupies a house that was during that period the disponer’s only or main residence will be disregarded as a period of occupation in that house unless the disponer is compelled, by reason of old age or infirmity, to depend on the services of the donee for that period. Old age refers to a person aged 65 or over.
d) Gifts taken on or after 20 February 2007: The house must be owned by the disponer during the 3 year period prior to the gift and, where the gifted house has replaced another property, each house must be owned by the disponer for the relevant part of the 3 year period that it was occupied by the beneficiary.
e) The recipient must continue, except where such recipient was aged 55 years or more at the date of the gift or inheritance or has died, to occupy that dwelling- house as his/her only/main residence for a period of 6 years commencing on the date of the gift/inheritance. Where the dwelling- house is directly/indirectly replaced by other property, this condition may be satisfied where the recipient continuously occupied both properties as his/her only/main residence for a total period of 6 out of 7 years commencing on the date of the gift/inheritance. A recipient absent during any time through working abroad is considered to remain in continuous occupation of that dwelling house.
The exemption will not be withdrawn where a breach of the condition referred to at ) above is as a result of the recipient requiring long term medical care in a hospital, nursing home or convalescent home or as a result of a condition being imposed by an employer on a recipient to reside elsewhere."

Lump sums are also liable to inheritance tax.

My advice? Co-habiting couples should marry, if they can.

mf