Thursday 20 October 2016

Inheritance 'tax trap' needs urgent remedy

Published 08/06/2015 | 02:30

Often enough, bereaved people, coping with a loved one's loss, are obliged to sell an asset to pay inheritance taxes
Often enough, bereaved people, coping with a loved one's loss, are obliged to sell an asset to pay inheritance taxes

Where there's a will there's a relative, the age-old black-humour gag has it. But inheritance is in reality an extremely serious business which often enough compounds grief and loss with stress and economic duress. Those who have lost a loved one can in fact also face a bill for being left an asset, such as property or land, with a huge paper value. Often enough, bereaved people, coping with a loved one's loss, are obliged to sell an asset to pay inheritance taxes.

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The recovery of the property market means that many more families, with very ordinary means, could be forced to deal with this situation. The main factor in much of this is of course the rise and fall of the property market.

When prices collapsed after the demise of the property boom in 2008, the threshold for inheritance tax was logically also lowered.

Two figures leap out of our report on the issue in this newspaper today. In 2009, a child could inherit in excess of €500,000 in value, and anything above that was taxed at 22pc. In 2015, that threshold has been more than halved and the tax rate on anything above it increased to 33pc.

As things stand, the country has among the highest "death taxes" in the world. Smaller families, with fewer beneficiaries, and those living in and around Dublin, are hardest hit.

The issue is serious and should be urgently reviewed. The people most concerned are also the ones who have been doing more with less for the greater part of what Finance Minister Michael Noonan has himself called our "lost decade".

Mr Noonan has signalled that he will look kindly on this issue and consider adjustments in the forthcoming Budget due in mid-October. The issue may in fact be given more urgency by an impending general election, due within the coming 10 months.

The Government must deal with this quickly. The need for remedy is more urgent due to the risk of additional suffering for the bereaved and a tax bill landed upon people who have not been enriched in any real way.

Long life is good - but quality of life counts

We have for a long time known that average life expectancy continues to increase for Irish people. But the findings of a study in the prestigious journal 'The Lancet' makes for very sobering reading.

These findings come from the largest and most detailed analysis of ill health and disability patterns in 188 countries around the world between 1990 and 2013.

A perusal of these makes it hard to avoid the conclusion that many people will be living longer to suffer for prolonged periods in their latter years. Conditions such as low back pain and depression are extremely prevalent.

Irish women are vulnerable to effects of osteoporosis while the increased instance of diabetes in Irish men over the past two decades is, quite frankly, terrifying. Anxiety disorders, migraine and hearing loss, some of which is due to age, are among the 10 leading causes of years lived with disability in Ireland.

The report gives additional force to the warning of the Fiscal Advisory Council last week that we need to provide more for an ageing population in the future. It is a timely reminder of the health system challenges which lie ahead.

Irish Independent

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