Pensions: Inheritance Tax Planning
The need to provide for loved ones after you die is an important issue. With a little planning, you can ensure that your beneficiaries pay minimal tax on their inheritance.
Here are the main assets caught in the inheritance tax net?
- All personal assets, including your house, contents and personal effects
- Life Insurance policies arranged on an own life basis
- Any lump sum death benefit payable under a pension scheme in the event of death before retirement.
- Each year, you are allowed to receive tax-free, a gift of up to €1,269.73 a year from another person.
- Agricultural relief of 90% is granted on farmland and buildings included in a gift or inheritance received by a farmer.
- Business relief of 90% is granted on "relevant business property" included in a gift/inheritance-with a number of qualifications.
- Your family home may be exempt if the beneficiary has lived there for at least the 3 years before your death, has no other residence- and keeps the family home for at leas another 6 years
- Life Assurance policies taken out to pay the inheritance tax due on your death are also exempt from inheritance tax, provided that the proceeds are used to pay the due. Any excess will be taxed. The tax is payable within four months of the date of the inheritance. OCI Financial Consultants can arrange a Section 60 Life Assurance Policy set up under trust for your beneficiaries. This will allow the proceeds to be paid into the trust rather than to your estate. This allows for the payment of tax due without having to sell any of the inheritance.
Policy Types
It is also possible to alter the policy should your needs change. For more information on inheritance tax planning, please contact us
