Did you know that 1 in 10 People are cohabiting in Ireland? This means that people who are not married or Civil Partners are treated as STRANGERS for Inheritance Tax purposes. (InheritanceTax)
What does this mean to you if you are one of these cohabiting persons? Basically in a nutshell, the ‘group threshold’ for inheritance tax is €15075. For cohabiting people inheritance in excess of this €15075 are subjected to a tax at 33%. (GroupThresholds)
An everyday example of this situation could be:
- A Cohabiting couple have Life Cover/Mortgage Protection of €100K
- Premiums paid from joint a/c
- Partner 1 dies
- €100K is to be paid out to Partner 2
- However, Partner 2 needs to prove to Revenue that premiums were paid from joint a/c
- ½ of inheritance is taken into account and will be taxed on €50K only
- -€15,075 threshold = €34,925
- -€34,925 – 33% = €11,525
- -€34,925 – €11,525 = €23,400 is paid out to Partner 2 after being taxed Twice
If you are a cohabiting couple, and are unaware of this inheritance tax regarding financial policies please call Brian at Mc Financial and we will discuss the best options for you both. However we will always tell you to seek legal and tax advice as the above information given is for guidelines only and does not take into account your personal circumstances.
Call MC Financial 01-8228022, www.mcfinancial.ie, Brian@mcfinancial.ie
