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Buachaill, Lawyer
Category: Republic of Ireland Law
Satisfied Customers: 10110
Experience:  Barrister 17 years experience
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my dad is inheriting 100k sterling from a deceased sister in

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my dad is inheriting 100k sterling from a deceased sister in law in England. The solicitors in England have suggested that my dad gets a deed of variation ie rewrite the will to include more beneficiaries so that he would pay less tax. we were wondering could my dad deed 16k each (the amount one can inherit tax free) to his wife, son and daughter and then pay the tax on the amount he inherits himself?
1. At the outset, you should realise that the Revenue do not give tax advice. So I wouldn't be giving them a ring again. To deal with your problem, it is perfectly feasible for your Dad to execute a Deed of Variation whereby he rewrites the terms of the will so several other people benefit as well as himself. HOwever, for yourself, your Mum and your brother, you need to realise that these Irish Inheritance Tax (Capital Acquisitions Tax) exemptions are a lifetime amount. Should you inherit something under your father's deceased sister in law's will, then you will have no such exemption for any further inheritance. So once used, the exemptions are gone.
2. Your father also needs to realise that once someone else is written into the will, then what is received is their money. It no longer belongs to your father. Your father has to be clear about this fact before he executes the Deed of Variation. YOur father is not really paying less tax. He is giving away his inheritance legally. That is what a Deed of variation is.
3. You should also receive tax advice as to whether there are any tax consequences under English inheritance law. It is fine dealing with Irish tax law, but this estate is an English estate and you will need to be sure that similar tax consequences follow under English law. The English Inheritance Tax threshold is £325,000, so inheritance tax is payable on all estates valued at above this amount. So unless the overall estate is valued at less than £325,000, then there still would be a liability to English inheritance tax. So I would advise you to get advice here.
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Customer: replied 3 years ago.

I don't really understand what you mean in point 1 when you say I'll have no such exemption for any further inheritance? Do you mean that whatever subsequent inheritance I receive for the rest of my life would have no tax free threshold??


4. Yes, it would mean that for that category of persons, you could not inherit anything more in your lifetime without paying tax on it. YOur inheritance tax exemption, which is a lifetime amount, would be used up. Most tax allowances apply annually. However, the inheritance tax exemptions are a single lifetime tax free amount. So, once used up, that is the end of it.
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