Liable for CAT?

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pingin

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My father died recently and left me the family home (in a rural area), with the proviso that my elderly mother can live there for the remainder of her life. I'm resident in Dublin but I intend to eventually live in the house when I retire.

Am I liable for inheritance tax, now or at a later date?
 
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Thanks mf1. I've been away for a while, so didn't get a chance to reply.

I've read through that a number of times but find it a bit legalistic. I'll have another go and see how I get on! Thanks again.
 
pingin said:
My father died recently and left me the family home (in a rural area), with the proviso that my elderly mother can live there for the remainder of her life. I'm resident in Dublin but I intend to eventually live in the house when I retire.

Am I liable for inheritance tax, now or at a later date?
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The simple answer is that you have received a taxable inheritance, and there's no particular reliefs applicable to you apart from the relevant parent to child Group Threshold.

What the link above illustrates is that where a property is inherited subject to a right of residence, then for tax purposes you will be deemed to have received an inheritance equivalent to 90% of the property value at the relevant date (usually date of death). "In practice, Revenue will allow a deduction of one-tenth of the market value of the dwelling-house where there is a right of residence and a deduction of one-fifth of the market value of the property where there is a right of residence, support and maintenance."

So if the house was worth 250k when you inherited it, you will be deemed to have taken an inheritance of 225k initially, and when your mother passes away in the future and you acquire the unencumbered freehold, then you take a second inheritance and there is a slightly different calculation to calculate the value at that point.
 
In practice, the Revenue will take a deduction of much greater than 10% for a right of residence. However, the % of the value of the house that you then take when that person dies (or gives up their right of residence) is also greater. So, if a 10% deduction keeps you under the tax free threshold now, you'd be as well to go for that.
 
Thanks all. You must pardon my stupidity, but, in simple terms, am I liable to pay a large sum to Revenue right now?
 
Well thats a different question altogether!

It depends on what gifts / inheritances you've taken previously, and the value of the present inheritance.
 
Mandelbrot, that was my original question! I'm not very good with financial matters. No gifts or inheritances previously. Hard to say what the value of the present inheritance is but probably around €120,000–150,000.
 
pingin said:
Mandelbrot, that was my original question! I'm not very good with financial matters. No gifts or inheritances previously. Hard to say what the value of the present inheritance is but probably around €120,000–150,000.
Click to expand...

Google is your friend! I (and others I'd suspect) assumed you had at least done the following:

1. Open Google and search "Inheritance Tax" - http://www.google.ie/#hl=en&sugexp=les%3B&gs_nf=3&pq=inheritance%20tax%20parent%20to%20child&cp=15&gs_id=r&xhr=t&q=inheritance+tax&pf=p&sclient=psy-ab&oq=inheritance+tax&gs_l=&pbx=1&bav=on.2,or.r_gc.r_pw.r_qf.&fp=e0bf8d895f2dd3fb&bpcl=35466521&biw=1280&bih=575&bs=1
2. Click on the top result - http://www.revenue.ie/en/personal/circumstances/bereavement/inheritance-tax.html
3. If you read that page, and it's not too long winded or heavy going, halfway down it is the following under the heading "What rates of tax apply?" - http://www.revenue.ie/en/tax/cat/thresholds.html

Your answer is there, in black and white - if you've never taken a gift / inheritance previously then you should be well within the Group A threshold.

I thought you understood the basic basics, and were asking a semi-basic question about the issues around your mother's right of residence...
 
Thanks mandelbrot. Clarity of language doesn't seem to be one of my great attributes either!

I had of course Googled this and I did see the relevant web page. My eyes tend to glaze over when reading Revenue documents, so I thought the more experienced people amongst you could give me better information.
 
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