Protection
By combining specialist financial advice with Chartered Tax Adviser expertise, we can consider both the financial and tax implications of your estate and identify solutions tailored to your personal circumstances.
We work with individuals and families to consider suitable tax-efficient investment structures, pension structures, Section 72 life assurance and trust structures as part of a broader estate and succession planning strategy.
Protection
A Section 72 life assurance policy** can be an effective way of providing for a future Capital Acquisitions Tax (CAT) liability arising on an inheritance.
Under Section 72 of the Capital Acquisitions Tax Consolidation Act 2003, the proceeds of a qualifying policy can be used to pay an inheritance tax liability without themselves being subject to CAT, provided the relevant conditions are met.
With appropriate cover in place, a Section 72 policy can help ensure that the tax liability is met from the policy proceeds rather than reducing the assets ultimately passed to your beneficiaries.
View our worked example.
Questions & Answers
All you need to know in regards to your estate planning.
Inheritance tax is a tax on the value of property and all other assets that people receive from you, when you die.
While there is no limit on the amount you can inherit from your spouse or civil partner, if your co-habiting partner, children and other relatives inherit assets from you, they may be liable to pay a significant tax bill.
The two legal documents that normally form the foundation of estate planning are:
A Will
This is the first step in estate planning. A will is a legal document that outlines how a deceased person’s assets are distributed.
A Trust
This is also a legal document but it’s somewhat different to a will in that it names another person – the trustee – as the owner of assets, for the benefit of a different person – the beneficiary. Trusts usual avoid probate which allows the beneficiary to access their assets in a timely manner.
Depending on the person’s assets, however other legal documents can be put in place to ensure the smooth transfer of wealth, which may include a Discretionary Trust or Family Partnership arrangement in some cases.
Inheritance tax is charged at a rate of 33% on chargeable assets left after your death, after the deduction of any tax-free threshold or business property or agricultural reliefs. Notably, tax is charged on assets located abroad also, where the deceased or the beneficiary is resident in Ireland.
At present a child can inherit €400,000 inclusive of all gifts and inheritances, Brother/Sister/Niece/Nephew/Grandchild €40,000 and any other relative €20,000. Additional information can be found here.
No, not if inheritable amounts fall above the tax-free thresholds, but a practical solution is to arrange a Section 72 whole of life policy on your life (and that of your spouse, if applicable), which would be used to pay the Inheritance tax when it falls due.
You could visit your solicitor or tax adviser, or come to us in the first instance. Once the liability is calculated, we can then provide you with the best value Section 72 whole of life policy on the market.
Using a Section 72 life policy we calculate your expected tax bill based on all your inheritable assets and then cover you the corresponding amount.
So, upon your death, the proceeds of the Section 72 life insurance plan will cover the tax bill, allowing your children to inherit your property and other assets tax-free. The proceeds of the Section 72 life insurance policy are exempt from inheritance tax. But it must be used to pay the inheritance tax bills that arise at that time.
We have decades of experience in assisting and advising clients in relation to inheritance tax and can provide the most cost effective simple solution.
A small gift exemption is available annually and allows the transfer of €3,000 to another person without the need to pay CAT (Capital Acquisition Tax). This small amount can add up over time and is an effective way for some to optimise their tax obligations.
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