Paying inheritance tax twice?

[hayeser]

A friend of my fathers who has no family recently told him that he was going to leave his house to him. The property would be worth about 800,000 even in today’s market. Should my father pass first the property would go directly to me.

My question is - is there anyway of avoiding paying the inheritance tax twice?

The owner of the property and my father are of a similar age and a scenario is possible where my father would inherit the property at an old age pay the tax, pass away a short time later, leaving the property to me but also requiring me to pay another huge inheritance tax bill.

Given that I would also be inheriting the family home, my allowance for inheriting form a parent would be close to being used up so making it almost impossible for me to keep the property.

Am I right in assuming that the inheritance tax would need to be bait twice? Is there anyway around this?

 

[Joe_90]

Hayeser,
Lucky You.
If for example The house owner died and left the house to your father then he would be subject to CAT 800,000 - 21000 x 25%. approx €195,000
If you moved into the house for a period of 3 years as your only residential property you could qualify for Dwelling house exemption for CAT and pay no tax.

 

[PC 80]

Your father's friend could leave the property directly to you. Then there would only be one inheritance tax hit. Obviously the friend would have to be ok with this but given that your father will leave it to you anyway and that it reduces tax he might be agreeable to it.

 

[hayeser]

Hayeser,
Lucky You.
If for example The house owner died and left the house to your father then he would be subject to CAT 800,000 - 21000 x 25%. approx €195,000
If you moved into the house for a period of 3 years as your only residential property you could qualify for Dwelling house exemption for CAT and pay no tax.

Thanks Joe, I genuinely hope that the day I receive any of this is a long way off.

I don't follow your suggestion fully. If the house was left to my father and I moved in while the house was his name for 3 years I could qualify for this the Dwelling house exemption is it?

I do own a house at present too so would that void me here anyway?

Your father's friend could leave the property directly to you. Then there would only be one inheritance tax hit. Obviously the friend would have to be ok with this but given that your father will leave it to you anyway and that it reduces tax he might be agreeable to it.

Yep this is definitely a solution its just one of those things that my father would like to avoid bringing up if possible.

 

[mathepac]

... I do own a house at present too so would that void me here anyway? ... .

Yes.