Where do I pay my deceased Irish uncle’s inheritance tax?

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Could you tell me, where do I pay my deceased uncle’s inheritance tax? I live in Northern Ireland and the lawyer handling the estate asked for my PPS number.

Am I paying in the UK or Republic of Ireland and is the tax self assessed? The there are no taxes owed to Irish Revenue on my part. The lawyer says he will charge € 300 to deal with the UK. Is it customary to ask an estate lawyer to provide a provisional invoice for the work done to date?

Mrs TG, e-mail

Cross-border taxation is always a tricky area and, for most ordinary people, it’s usually not something they come across. Because of our border and also because of the international mobility of our population, this is an area that tends to affect the Irish more than most.

With regard to the United Kingdom, the situation can be more confused as the two jurisdictions apply totally contradictory regimes in matters of inheritance tax. Here, it is the beneficiaries who are assessed and may be taxable; in the United Kingdom, tax is levied on the estate when it is large enough to exceed the exemption threshold.

Countries usually have rules determining where tax is paid and many also have double taxation agreements to ensure that when both jurisdictions have taxing powers, people are not taxed twice on the same money. , often by receiving credit in one jurisdiction for any taxes paid in the other.

You don’t say anything about the size of your uncle’s estate or, in fact, how much he left you, but you can make do with the general rules that apply.

Under Irish Capital Acquisition Tax, which is the tax code governing estates and gifts in the Republic, an estate is taxable in the Republic if the deceased person was resident in Ireland for tax purposes, if the person receiving the inheritance resides there, or if the relevant property is based here.

If any of these apply, the Irish Revenue Commissioners will have jurisdiction.

In this case your uncle was residing here which means you will be liable for Irish Inheritance Tax even if you are resident in the UK.

Exemption

There is an inheritance tax exemption but it can be one of three digits, depending on the relationship between the deceased and the beneficiary. In your case, as a niece, you will fall into category B, where there is a tax exemption for the first € 32,500 you receive.

The catch is that if you have already received a donation greater than € 3,000 or an inheritance from a grandparent, an uncle / aunt or a brother who is tax resident in the Republic, this will be deducted. exemption because it is a lifetime exemption covering gifts and inheritances from one of these people.

Anyway, assuming you haven’t benefited from it before, you pay no tax on the first 32,500 € of value of any inheritance from your uncle: you will pay the tax to the tax authorities at up to 33% on the balance.

For the rest, I am a little puzzled. You mention an arrested PPS number. This is akin to the UK National Insurance Number and is required to access social assistance benefits. And like a national insurance number, it neither ceases nor expires.

It is a unique identifier assigned to you, and only to you. It may not be your concern at the moment, but as long as you had one initially, it will still work if you ever return to the Republic.

In this case, it is also required for the SA2 business declaration (homologation) form that the executor of your uncle’s estate will have to file with the tax authorities. The executor is required to provide details of all beneficiaries of the estate, including their PPS numbers.

You will also need this when you file your own IT38 Inheritance Tax Return with the Irish tax authorities, as you will need to do this to settle any tax liability you have on this estate. And yes, it is self-assessed but naturally you can expect it to be referenced with the SA2 form filed by the executor.

You say you have no taxes owed to Revenue. I’m not sure if it’s general or specific to this heritage. If you say that the inheritance is less than the threshold of € 32,500, that is fine, but if it is greater than 80% of this amount – that is € 26,000 – you must always declare it to the tax administration itself. if no tax is due.

Finally, with regard to the lawyer, I am not sure what arrangements are made to charge a sum to a beneficiary because they reside in a different jurisdiction. It seems doable even though I don’t see why it’s warranted in this case. Normally, all legal fees are charged to the estate rather than to the individual beneficiaries. I would certainly ask for clarification as to why you are charged with taking an inheritance and why such a charge is not a normal legal cost against the estate if it is valid.

It’s not uncommon to ask a probate attorney for a draft draft law, but only if it’s all dragging on. In any event, any request for such a calculation would come from the executor, and not from a beneficiary.

Please send your questions to Dominique coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email [email protected]. This column is a reading service and is not intended to replace professional advice. No personal correspondence will be exchanged


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