Inheritance Tax Planning Capital Acquisitions Tax – Inheritance and Gift Tax.
No matter what your net worth is, it is important to have a basic estate plan in place which should be outlined in your will. This ensures that your family and financial goals are met after you die. CAT (Capital Acquisitions Tax) can significantly reduce the value of a gift or inheritance. Over recent years the thresholds have been reduced significantly and the tax rates have increased. Other threshold amounts apply depending on the relationship between the person who receives the gift/inheritance and the donor. Ireland has one of the highest Capital Acquisition rates globally which is currently set at 33%. An annual gift exemption of €3,000 applies. All benefits received since 05/12/1991 are taken into account.
The following are two ways that these inheritance tax or gift-tax bills may be reduced either through a Section 72 Whole of Life Insurance Plan or a Section 73 Savings Plan, where by the proceeds from such plans can be used to pay part or all of an inheritance tax or gift tax bill.
For more information on inheritance and acquisitions taxes, contact Faith Fahy.