Inheritance Planning

– pleanáil oidhreachta

Reasons for Succession Planning

Recent changes in Capital Gains and Inheritance taxation law has meant that a significantly greater number of estates will be subject to Inheritance Tax than heretofore and also that inheritance tax bills will be higher than was the case previously.

Inhertance tax and Capital Gains tax is currently at 33% and this is much higher than the previous 20% rate that applied for much of the last ten years.

In addition the lifetime thresholds have changed significantly and are currently:

• €310,000 – Child or minor child of a deceased child
• €32,500 – Brother,sister,child of a brother or sister, lineal ancestor or descendant.
• €16,250 – Other

As can be seen where there is now a potential significant tax liability for many ordinary families where this may not have been the case when the thresholds and rates were higher and lower respectively.

Section 72/Section 73 policies

There a number of different variants of these policies, but typically, they are whole of life policies and generally run until death of final surviving spouse.

The sum assured is guaranteed on death and where the proceeds are used to clear the tax liability on death they do not form part of the estate for calculating Inheritance Tax liability.

As there are a number of different type of these policies, getting the one that is most suitable for your needs will depend on a number of factors, not least of which is the mitgation of potential liabilities. Getting advice on the right plan for your needs is critical.