Welcome to the Financial Column in association with Money Plus, Bridge Street, Boyle.
Q. Our son, who is single, sold his apartment in Dublin in 2011 and bought a new house jointly with my wife and myself. This house is currently worth c. €600,000. We intend to leave our shares in the house to him when we die. He doesn’t own any other property.
1) Does he have to be living in the house for 6 years after we die to avoid this being subject to inheritance tax.
2) Can he inherit other assets from us up to the new €280,000 threshold without having to pay tax?
A. First – your son could be exempt from inheritance tax under the Dwelling House Exemption provided certain conditions are met. If these conditions are met then this would not count for inclusion in the €280,000 inheritance threshold that he can receive tax free from you over his lifetime.
To qualify for this exemption, your son must have lived in the house for at least 3 years before inheriting your shares in it and, if he is under 55, would have to continue living in it for at least 6 years after inheriting. He must not own or have an interest in any other property either here or abroad.
If he qualifies for the dwelling house exemption he can also inherit up to €280,000 tax free in total, from your wife and yourself. This threshold will be reduced by any taxable gifts received from you since 1991. However small gifts of up to €3,000 a year from each of you would be ignored for tax purposes.
For advice on estate planning including using the annual small gift exemption you should consult a local independent financial broker or adviser such as Money Plus. In this regard Belinda McCauley and her colleagues at Money Plus, Bridge St, Boyle would be delighted to assist you. Belinda can be contacted at 071-9194000/ 086-7847827 or by email: [email protected].