Inheritance tax in Ireland
In Ireland is in the form of Capital Acquisitions Tax a (capital acquisition control) inheritance ( Inheritance Tax ) from the acquisition of death or as a gift taxes ( Gift Tax ) taken unrequited transfers among survivors in the amount of 25%.
Inheritance and Gift Tax Act
Inheritance and gift taxes are uniformly regulated in the Capital Acquisitions Tax Act , originally from 1976. It is basically designed as an inheritance tax, i.e. the object of taxation is the acquisition from the heir (or recipient). The Probate Tax , introduced in 1993 as an estate tax , with which properties in the estate were directly taxed at an additional 2% of the market value, was abolished again in 2001. Nevertheless, there may be a kind of estate taxation, since the estate is treated as a kind of special fund according to the common law concept , which is assumed above all in the so-called discretionary trust , in which the estate is managed by an administrator (trustee) according to the testator's specifications, however, it is managed with some freedom of choice. Irish inheritance tax law provides a special treatment for this.
Personal tax liability
You are liable to tax if either the testator (donor) or the heir (recipient of the gift) resides in Ireland, which requires an actual residence of at least 183 days per year. In this respect, Ireland has given up the more extensive requirements of the Anglo-Saxon term of domicile in favor of the term of residence, although special features still apply to the first taxable establishment of Irish residence. All property resident in Ireland is taxable, but not foreign property. Balances with Irish banks are considered Irish. Limited tax liability exists on Irish resident property owned (or donated by) a deceased resident abroad.
tax rate
Inheritance and gift tax is levied at a uniform tax rate of 25% of the market value. This rate was still 20% in November 2008 (since 1999) and, as a result of the increased financial requirements due to the global financial crisis in 2008/2009, it was first increased to 22% and since April 8, 2009 to 25%. Until 1999, the tax rate has been steadily reduced since its introduction in 1976 (in 1978 it was between 20% and 60%, depending on the amount of the income). A special regulation applies to the separately administered estate ( discretionary trust ), for which a one-off inheritance tax of 6% of the estate value is levied and for which 1% is due annually from the following year.
Tax exemption
Acquisitions from spouses are tax-free. Repurchase is also tax-free in the event of the death of children by their parents, if these objects have previously been transferred to them by their parents. Finally, the acquisition of a house that the purchaser inhabits at least three years before the transition is not subject to tax, provided that he continues to live in it for at least six years. If such a house is the subject of a gift, the tax exemption does not apply if the donor has also lived there in the previous three years. Donations to non-profit or benevolent institutions and from recognized architectural monuments are also tax-free.
Allowances
The heirs are divided into three groups for the distribution of tax exemptions:
- Group A: children, underage grandchildren of children who have died before, parents (in the case of unconditional inheritance)
- Group B: parents (if not in group A), siblings, nieces and nephews, direct descendants or ancestors
- Group C: all other people
The exemptions amount to 434,000 euros (group A), 43,400 euros (group B) and 21,700 euros (group C). As such, the allowances are indexed according to economic development, but they were reduced in view of the financial crisis with effect from April 8, 2009 (from 542,000 euros (A) / 54,400 euros (B) / 27,127 euros (C)).
In the case of gifts, regardless of the passage of time, all gifts made by the same donor are added together with regard to the tax exemption.
Perks
If domestic business assets are inherited (or donated) by tradespeople and freelancers, a valuation deduction of 90% is applied, so that inheritance tax only applies to 10% of the business assets. In the case of holdings in companies, the acquirer must receive at least 25% of the votes in view of the control made possible by this. If he has worked full-time there for at least five years, it is sufficient if he has at least 10% of the capital. Business operations may not be limited essentially to asset management activities or the operation of financial and real estate trading. The business or the participation must have belonged to the testator for at least two years before the death or to the donor five years before the transfer. After the transfer, operations must be continued for at least ten years; if the transfer is continued for at least six years, half of the discount is granted. A corresponding discount is also granted when transferring land used for agriculture and forestry to a farmer.
Overlaps with capital gains tax
In Ireland, the capital gains tax is a separate tax on realized gains on a sale. This tax mainly affects real estate, mining and mineral rights as well as goods and rights derived therefrom, such as shares in companies that hold such goods or rights to more than 50% of their property. Free gifts among the living are also considered taxable profit realization, while acquisitions due to death are not included. This does not apply without exception, however, since z. B. some acquisitions of certain estate special funds (trusts) are also subject to capital gains tax. Insofar as there is an overlap in the taxation with inheritance and gift tax, the capital gains tax will be offset against the inheritance or gift tax, insofar as this is due for the same tax objects, up to the full amount.
General
A tax return must be submitted if the benefits received reach at least 80% of the tax exemption. The date of the donation is decisive for the valuation; in the case of inheritances, the day the estate is disputed (end of its administration). The declared tax must be paid within four months.
In order to avoid double taxation in the area of inheritance tax, Ireland has concluded agreements with the United Kingdom and with the USA (there only for inheritance tax). Because Ireland restricts its taxation rights to property located in its national territory, double taxation can hardly occur from an Irish perspective.
See also
Individual evidence
- ↑ Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 103 (Ireland)
- ↑ Irish Treasury: Capital Acquisitions Tax Manual, Part. 1 Introduction, page 3f. (English), Archived copy ( Memento of the original from May 13, 2009 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Irish tax authorities: Capital Tax Rates and Tresholds (English), archived copy ( Memento of the original dated June 15, 2009 in the Internet Archive ) Info: The archive link was automatically inserted and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Irish tax authorities: Capital Acquisitions Tax Manual, Discretionary Trust Tax (English), archived copy ( Memento of the original dated May 13, 2009 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Irish tax authorities: Capital Acquisitions Tax Manual, Part. 1 Introduction, page 5 (English), archived copy ( Memento of the original dated May 13, 2009 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Irish tax authorities: Capital Tax Rates and Tresholds (English), archived copy ( Memento of the original dated June 15, 2009 in the Internet Archive ) Info: The archive link was automatically inserted and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Irish tax authorities: Capital Acquisitions Tax Manual, Part. 1 Introduction, page 4 (English), archived copy ( Memento of the original of May 13, 2009 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Irish tax authorities: Capital Acquisitions Tax Manual, Part. 12 Business Relief (English), archived copy ( Memento of the original dated May 13, 2009 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. ; Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 103 (Ireland)
- ↑ Irish tax authorities: Capital Acquisitions Tax Manual, Part. 11 Agricultural Relief (English), archived copy ( Memento of the original dated May 13, 2009 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. ; Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 103 (Ireland)
- ↑ Irish tax authorities: Capital Acquisitions Tax Manual, Part. 13 Credit for Capital Gain Tax (English), archived copy ( Memento of the original dated May 13, 2009 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 103 (Ireland)
literature
- Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 103 (Ireland)
