June 8, 2015
It is great to see the Irish Independent today highlighting the Inheritance Tax trap, where ordinary families are being hit by enormous tax charges on even modest inheritances.
The tax free threshold for parent-child gifts and inheritances has been cut by almost 60% since 2009.
Now, increasing property prices mean that more families than ever are being hit by Capital Acquisitions Tax (CAT).
Worse still, CAT is now levied at 33%. This represents a breathtaking 65% hike on the 20% rate that applied up to November 2008.
This is bad news, and not just for those receiving inheritances and gifts:
- The high rates and low thresholds actually stifle the tax take from CAT, as people who hold even modest levels of wealth are discouraged from gifting them to family members until after their deaths.
- Such wealth-hoarding is particularly unproductive in the Irish economy which has suffered a major credit squeeze since 2008.
The situation is actually much worse for those who wish to leave assets to nieces, nephews or other relatives, where the tax-free thresholds are pitifully low.
Our high CAT regime is clearly delaying economic recovery, and must be reformed without delay.
For more, see Charlie Weston’s article and opinion piece, and the paper’s editorial in today’s Irish Independent.
October 10, 2012
We are now only three weeks away from the 31 October tax deadline. This year, the annual Halloween “Pay & File” date is more important, and covers more taxes, than ever before.
31 October 2012 is the deadline to:
- File a Form 11 Self-assessment Income Tax return for 2011
- Pay any remaining Income Tax liability for 2011
- Pay Preliminary Tax liability for 2012
- File a 2011 Capital Gains Tax Return, if you have made a Capital Gain in 2011.
- File a Capital Acquisitions Tax Return if you received a Gift or Inheritance in the period from 1 September 2011 to 31 August 2012.
- Pay a Capital Acquisitions Tax liability arising from a Gift or Inheritance in the period from 1 September 2011 to 31 August 2012.
- Pay Domicile Levy and file a Domicile Levy Form DL 1 tax return.
- Make a backdated RAC, AVC and PRSA pension payment to claim tax relief for 2011.
It’s worth noting that the 31 October deadline affects all classes of taxpayers, not just the self-employed or those on high incomes. If you think you need to file a return, or make a tax payment this October, give yourself plenty of time to avoid the late end-of-month rush.
If you don’t fully understand all aspects of your tax position, you should strongly consider getting an experienced accountant or tax specialist to advise your on your liabilities and file your return on your behalf. Don’t leave it too late though, as all accountants and tax experts will have a heavy workload in the coming weeks.
For more detail, see my recent article on the 31 October deadline for Contemporary Living.