Inheritance Tax Planning

Inheritance tax is payable on nearly all assets transferred from one generation to the next such as property, shares, pensions etc.

A Section 72 policy is an inheritance tax planning tool. It allows for an inheritance tax liability to be provided for in a highly tax efficient manner hence easing the burden of transferring wealth from one generation to the next.

Technically a Section 72 policy is a policy set up to meet the requirements of Section 72 Capital Acquisitions Tax Consolidation Act 2003. Usually the policy is set up under a Section 72 trust making the proceeds of the policy exempt from inheritance tax.

Inheritance Tax is a form of Capital Acquisitions tax and is levied at a rate of 33% on sums received over prescribed thresholds.

The applicable inheritance tax threshold is determined by the relationship between the parties concerned; current thresholds are as per the table below:

Irish Capital Acquisitions tax rates from 6th December 2012
Threshold Relationship

225,000 Child, minor child, or child of a deceased child.
30,150 Brother, sister, child of a brother or sister, lineal ancestor or descendant.
15,075 Other

An annual gift exemption of 3,000 applies. All benefits received since 05/12/1991 are taken into consideration. This is a complex issue and it is advised you seek advice on this before making any decisions.

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