Tax liability on inheritance from a different country

pennywise

Registered User
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46
Hi

My husband and myself are both foreign nationals from another EU country. Kids have an Irish passport. Which tax rules apply for inheritance? The ones from our parents country or Irish rules?

Thanks
 

Thirsty

Frequent Poster
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Do you live, work & pay taxes in Ireland?
Has the inheritance arisen?
And if so from what country?
 

Marc

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If you are genuinely non-domiciled (where do you call home, do you intend to return etc?) then you are not liable to Irish Capital Acquisitions tax until you have been Irish resident for 5 consecutive tax years.

At which point you will be subject to Irish Inheritance tax and possibly depending on where your parents live, also taxes in their country.

For example I am subject to UK inheritance tax on my worldwide assets and Irish CAT on land and property here in Ireland.

My kids are Irish, have Irish passports but take the domicile of their father so they are Irish citizens, Irish resident but UK domiciled.

It’s worth setting out your circumstances in a little more detail than you have and, as necessary, taking legal advice here - I can recommend some very good lawyers who will then be able to reach out to your parent’s lawyers and formulate a plan.
 

pennywise

Registered User
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46
Thanks for your answer. To clarify, we've been here 19 years, home owners, working for Irish companies and paying taxes. I'm in the process of applying to citizenship to get voting rights. My parents want to give some of their inheritance to their grandchildren, and the question came up with their solicitor about taxes. She doesn't have any knowledge in EU laws and advised us to find out. My parents are from France
 

jpd

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1,722
Inheritance taxes in Ireland are paid by the inheritor and the provenance of the inheritance does not come into account other than tax paid in the originator country may be off-settable against tax due in Ireland. The double taxation treaty between Ireland and France does not cover capital acquisition taxes but unilateral relief will be available.

In France, gifts to grandchildren are taxed according to a rising scale
 
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Marc

Frequent Poster
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So, two examples where the provenance of the inheritance are extremely relevant, there may be more examples

USA - if an Irish resident inherits from a US resident, the USA taxes the inheritance as full and final liability. Even if the tax paid in the USA is nil due to the exceptionally large exemption.

UK - if one takes an inheritance from the UK it is possible to vary the UK Will (say to a trust) within two years of death provided all the beneficiaries of the will are over the age of majority and in agreement to the variation.

That would prevent the inheritance hitting in Ireland and potentially avoid Irish CAT.
 

Iredawg

New Member
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So, two examples where the provenance of the inheritance are extremely relevant, there may be more examples

USA - if an Irish resident inherits from a US resident, the USA taxes the inheritance as full and final liability. Even if the tax paid in the USA is nil due to the exceptionally large exemption.

UK - if one takes an inheritance from the UK it is possible to vary the UK Will (say to a trust) within two years of death provided all the beneficiaries of the will are over the age of majority and in agreement to the variation.

That would prevent the inheritance hitting in Ireland and potentially avoid Irish CAT.
HI Marc- your reply in May 2019 is of interest to me. I want to ensure I understand this statement-
'USA - if an Irish resident inherits from a US resident, the USA taxes the inheritance as full and final liability. Even if the tax paid in the USA is nil due to the exceptionally large exemption. '
I am trying to understand the Irish gift tax implications of the following scenario:
I am dual citizen (USA/Ireland) and have been resident/worked in Ireland over 20years. I work in Ireland and file both Ireland taxes and USA taxes annually. I have a US resident sibling and I am trying to understand the Irish gift tax implications of the following scenario. My US resident sibling would plan to gift $30K USD this year/2019. I believe this would be below the CAT 'Group B' threshold and therefore no Irish tax- correct? However- If I received an additional gift or inheritance in subsequent years- any cumulative value over €32500 would be taxed at 33%- correct? I also have a USA based stock and cash account...would this provide any alternatives in future gifts and any cumulative value over €32500 would be taxed at 33%. Thanks for any insight or recommendations of who might be able to assist!
 

Marc

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The Irish/US Double Tax treaty only covers Inheritance Taxes it doesn’t explicitly cover gift taxes. Another total mess to try and work through.

You need to engage an Irish Solicitor as you have been living in Ireland for more than 5 years and therefore caught by CAT
 

Iredawg

New Member
Messages
3
The Irish/US Double Tax treaty only covers Inheritance Taxes it doesn’t explicitly cover gift taxes. Another total mess to try and work through.

You need to engage an Irish Solicitor as you have been living in Ireland for more than 5 years and therefore caught by CAT
Thanks Marc- much appreciated! I'm new to the forum....can anyone provide recommendations of Irish Solicitors with USA/Ireland tax expertise?
 
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