Tax implication -Life Insurance policy

That depends on you owned the policy and who paid the premiums.

If the policy is yours, ie you took it out on the life of a third person and you paid the premiums, then the money is yours and I don't think there is any tax liability.

If someone else paid them then it considered a gift or inheritence from the owner of the policy or his estate and CAT could be chargeable.

If the policy is a Section 60/118 explicitly taken out to pay Gift/Inheritence tax then the rules are more complicated.

Joe

Thanks Joe for the information. It would be where someone else has paid into the life Insurance policy and has named a third party as the beneficiary upon their death. The third party was wondering what the tax implications would be for them upon receiving the money.

Depending on their relation to the donor it would be

(Amount of gift ie value of policy minus group threshhold ) x 20%

assuming they have received no other gifts from donor in the same group since Dec 1991

There are 3 groups which are (in a simplified form)

I: received from parents - threshold about 450,000 euro

II: received from brothers/sisters/grandparents/uncles - threshold about 45,000 euro

III: everyone else - threshold about 22,500 euro

CAT is calculated on the accumulated gifts/inheritences received since Dec 1991. If there were prior gifts/inheritences from someone in the same group, then the threshold may already have been used up or partially used up.

Joe

Oops - forgot that if the recipient is the wife of the donor, then no CAT is due - all gifts/inheritences between spouses are exempt from CAT