If you get to grips with death tax, it'll save you a lot of pain
Middle Ireland is in for a shock. There is a lot of money to be passed down from one generation to the next, but large numbers of people are unprepared for the fact that they are facing big bills from the State.
This tax shock comes as we have one of the tougher inheritance tax rates regimes in the world. Families need to get up to speed on the death tax.
Our inheritance tax rate at 33pc is one of the highest among the countries that make up the Organisation for Economic Co-operation and Development (OECD).
And the tax kicks in here at much lower values than in other western countries.
There was no change in the amount of money a parent can leave a child in last year's Budget, despite promises to increase the so-called tax-free threshold.
The first €310,000 of the value of assets left by a parent to a child is tax free. Amounts over that are taxed at 33pc.
A grandparent can leave a property or other assets up to the value of €32,500 without paying tax. Values over this are taxed.
Families are also allowed to give a gift of €3,000 a year to a child, without reducing the parent to child tax-free threshold.
The Government promised to increase the threshold for children paying inheritance tax to €500,000 in the Programme for Government.
The inheritance tax take is rising fast. This year, death taxes are expected to have doubled to around €472m when compared with what was paid in 2010.
All this means thousands of families are being unexpectedly hit with huge inheritance tax bills, as rising property prices push them over exemption limits.
Smaller families, where there are fewer people sharing in the inheritance of a property, end up being hit hard by enormous inheritance bills.
The reduction in the tax-free thresholds during the austerity years has resulted in even modest properties - particularly in Dublin - being hit with big tax bills when transferred from parents to offspring.
Take a family with a property in Cork city valued at €273,894. This is based on a typical valuation for the area from Daft.ie.
If that property is left to a grandchild, no tax is due on the first €32,500. For amounts over this the inheritance tax of 33pc kicks in. This means the remaining €241,394 house value will have an inheritance tax bill of €79,660.
Getting to grips with the workings of the tax will save on a lot pain. Of course, if the Government was to keep to its promises to again increase the tax-free thresholds, that would be an enormous help to those who intend to provide for their own families and ensure they are not dependent on the State.