Retirement And Inheritance Planning

On Tuesday 1st October, the Minister for Finance, Jack Chambers, delivered his first budget speech and the last of the current government. In that speech, he announced a welcome change to all the thresholds relating to Capital Acquisitions Tax (CAT) and what can be received as a gift or inheritance tax free.

Successive Irish governments have been successful in imposing a high tax charge on inheritances over the last number of years, without any protest from the public, who perceive inheritance tax to be for the wealthy only. Alan Shatter, once a Minister for Justice, led a campaign over the summer of 2024 for the government to address the issue of CAT and in fact, abolish it.

The abolishment of CAT would be a step too far for many, but the government has increased all the thresholds which will reduce the overall tax burden for beneficiaries.

The increase of €65,000 in the Group A Threshold is a significant change for those inheriting from their parents. The fact that the other thresholds have also been increased, albeit with a smaller percentage increase, is still good news for many.

The tax liability for a child inheriting assets from parents from 2nd October 2024 has decreased significantly from one who inherited assets in 2023. Please note that the applicable inheritance tax rules are those that are in place on the date of death rather than on the date of the receipt of assets.

This represents a decrease in the tax due of €21,450. The amount may have decreased but the tax burden remains.

By taking out a Section 72 Inheritance tax policy, that tax can be paid when the child inherits your estate.

A Section 72 policy is a Life Insurance policy set up by parents under Section 72 trust for their children. The proceeds of the policy are exempt from inheritance tax because they are used to pay off inheritance tax. The effect is that your children inherit your estate without having to pay inheritance tax, yet the Revenue will receive the tax that was incurred on the passing of your estate.

Malahide Insurance Shop offers a Section 72 policy through the Guaranteed Whole of Life policy, where the premiums are guaranteed not to change for the duration of the plan.

And there is no better time to avail of the Guaranteed Whole of Life policy as premiums can be discounted by 5% over the coming months.

Talk to your Broker Consultant today about Malahide Insurance Shop’s Guaranteed Whole of Life policy which may be used for the purposes of Section 72.