Irish tax and inheritance question

May 11, 2015 10:33 PM

A dear friend is about to pass away from cancer. She is an Irish national currently residing in Ireland. Most of her career was spent oversees in a non-EU middle-eastern country where her life savings of about $250,000 is currently banked. She has avoided repatriating those funds back to Ireland due to tax reasons. But as time is very short, she would now like to do this and pass them on to her family after her death. I have advised consulting a lawyer. But as time is very short, does anyone know what taxes is she liable to incur with this transaction, including inheritance taxes of her heirs? And is there an optimal method which will minimize her tax burden in this situation? Thank you.
posted by MacChimpman to Work & Money (5 answers total)

Excuse brief response, on mobile, but citizen Advice Bureau .
posted by Iteki at 11:45 PM on May 11, 2015 [1 favorite]

Who specifically do you mean by heirs? The rate is different for any children (the threshold is €225,000) then for other parties or for charities.

Are her Irish taxes up to date, ie has she paid her Irish taxes on her overseas income? Because if so, what additional taxation is she imagining she is subject to when bringing those funds into the country?
posted by DarlingBri at 1:39 AM on May 12, 2015

Im assuming those funds were not taxable as they remained outside Ireland. Repatriating them to Ireland will trigger taxes for the earner. Thats sort of the standard deal for any one other than Americans.

I also believe that someone who is domiciled in Ireland getting the inheritance will be liable for the inheritance tax which is 33%. 33% of 250k is enough money where its worth finding a tax lawyer who can advise on the suitability of certain kinds of trusts that may help avoid tax. So yeah, get a lawyer.
posted by JPD at 4:21 AM on May 12, 2015 [1 favorite]

Also I dont think there is an advantage to repatriating the funds before death as that would trigger income tax on top of the inheritance tax.
posted by JPD at 4:22 AM on May 12, 2015 [2 favorites]

It's very hard (impossible) to say what her inheritance tax situation will be without fully knowing her circumstances (does she own property, where is it, has she transferred money to her beneficiaries in the past n years, is she leaving part of her estate to charity, does she have any business assets such as shares, did she have a spouse who died in the past n years, etc). Inheritance tax has a lot of nooks and crannies. There is a general overview here on the Irish govt website, but she will probably need professional tax advice unless her estate is very simple.
posted by NoiselessPenguin at 6:26 AM on May 12, 2015