1) At present transfer of assets by gift or inheritance are liable to:
- CAT – Gift/Inheritance tax 25%
- CGT – Capital Gains Tax 25%
2) Reliefs available at present:
- agricultural and business assets qualify for a 90% reduction
- Capital Gains Tax exemption applies to:
a) Gifts if the transferor is over 55 years and has owned the asset for 10 years
b) All inheritances
3) Commission on Taxation recommendations:
- Agricultural and business assets should only qualify for a 75% reduction, subject to an overall monetary limit of €3 million in the amount of the reduction.
- CGT exemption only apply to asset values up €3 million.
4) Fine Gael proposed in their election manifesto:
- Increase gift/inheritance tax rates to at least 30%
- Cut threshold by at least 20%
- Increase CGT to 30%
5) Labour also proposed increasing yield from capital taxes.
So if you are planning to transfer assets, it would be prudent to consider doing it soon, as there is no doubt that the relevant tax rates are on the way up, the relevant thresholds are being reduced and certain reliefs and exemptions are being curtailed.
It is worth noting that asset values are at an all time low which means that the market values assessable to tax are substantially reduced. This is another reason to act now if you are considering a transfer
For more information please contact us