Whether you have accumulated personal wealth, or it is tied up in your business, there are various reliefs and areas of planning you can implement to ensure that as much of that hard-earned wealth remains in your family.
With Revenue receipts from CAT up over 65% since 2011 this area of taxation has become more and more researched when it comes to providing for your nearest and dearest, in the most tax efficient manner possible.
As part of your overall financial planning it is important to understand what you should be doing when it comes to planning your estate.
Firstly, we have outlined what is subject Gift Tax and Inheritance Tax and how it is calculated.
A CAT liability of 33% may apply where:
Example for gift and inheritance tax
Revenue consider the following as “normal payments” and therefore may not fall within the scope of CAT:
It is important to remember that CAT is a self-assessment tax. A CAT Return must be filed with Revenue Commissioners where the inheritance/gift either by itself or when aggregated with prior gifts exceeds 80% of the appropriate tax-free threshold amount mentioned above.
Understanding Gift Tax and Inheritance Tax will help you transfer your wealth tax efficiently and should be considered as part of your overall financial planning.
Look out for our next article where we will continue our look at Estate Planning and focus on reliefs and exemptions available to individuals.