Brandon Lee
In Ireland, the tax on a person's estate after their death is called Capital Acquisitions Tax (CAT), a type of inheritance tax. The current rate of inheritance tax in Ireland is 33%. The recipient or beneficiary is responsible for paying the tax on the gift or inheritance. While individuals who receive an inheritance do not have to report it, banks are required to report transactions over a certain amount to the relevant authorities. In the case of the US, banks must report transactions over $10,000 to the IRS.
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What You'll Learn
Inheritance tax in Ireland
CAT is payable by the recipient or beneficiary and is applicable to all property in Ireland. It is also payable on property located outside of Ireland if either the person giving or receiving the inheritance is an Irish resident for tax purposes. The tax must be paid by the 31st of October for any inheritance dated in the year to the 31st of the previous August.
There are some exemptions to paying inheritance tax in Ireland. Gifts and inheritances given or received by a civil partner or spouse are exempt from CAT. Additionally, if you are a widow, widower, or surviving civil partner, you may be eligible for additional relief. You also do not need to pay CAT on a gift with a value of €3,000 or less from any one person in a calendar year. Tax-free thresholds depend on your relationship with the person giving the gift or inheritance. For example, the Group A tax-free threshold is €400,000 and applies to children (including adopted and stepchildren) and minor children of a deceased child of the donor. Parents fall within this threshold when they take absolute inheritance of the inheritance on the death of their child.
Furthermore, if you have inherited a property and it was your main residence for three years before the donor's death and continues to be your main residence for six years after inheriting (unless you are over 65), you may be exempt from inheritance tax. If the deceased is a child who has taken a non-exempt gift or inheritance from a parent within the previous five years, the parent is then exempt from inheritance tax.
While it can be challenging to completely avoid inheritance tax in Ireland, careful planning can help reduce the amount of tax beneficiaries pay. This can include increasing the number of beneficiaries in the will and taking advantage of the annual tax-free gift allowance.
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![A Concise Guide to the Practice (Contentious and Non-Contentious) of the Court of Probate, Ireland, and Its District Registries : with an Appendix Containing the Rules, Forms 1877 [Leather Bound]](https://m.media-amazon.com/images/I/617DLHXyzlL._AC_UY218_.jpg)
Joint bank accounts
In Ireland, when a person dies and leaves an inheritance, the process of notifying the relevant parties can vary depending on the nature of the assets involved. While it is not a legal requirement for banks to be specifically notified of an inheritance, there are certain scenarios where they may become aware of it. One common situation is when the deceased held joint bank accounts with another person, often a spouse or civil partner.
The rights of survivorship apply to joint bank accounts, which means that the surviving account holder( own the account and its contents jointly and equally. This also means that the funds in the account are generally protected from any claims made by the deceased's creditors, as the account is legally owned by the surviving holder(s). However, it's important to be aware that joint accounts can have their own complexities, especially if there are disputes or conflicts between the account holders. For example, if one account holder withdraws a large sum of money without the knowledge or consent of the other holder(s), it could lead to legal complications.
To open a joint bank account in Ireland, both parties typically need to provide identification and sign a joint account agreement. This agreement outlines the rights and responsibilities of each account holder, including how the account will be managed and how disputes will be resolved. It's important for both account holders to understand the terms and potential implications, especially in the event of death or other unforeseen circumstances. It's always a good idea to seek legal advice when considering a joint account, especially if there are concerns about the financial stability or potential actions of the other account holder.
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Rights of children
In Ireland, there is no automatic right for a person to receive anything in their parent's will. However, children do have the right to inherit from their parents under certain conditions. If there is no valid will or the will is invalid, and if the deceased parent is unmarried or their spouse has passed away, the entire estate is divided equally among the surviving children. If the deceased parent was married and their spouse survives them, the surviving children are entitled to one-third of the estate, divided equally among them. This is also the case if there is a valid will.
Children born inside or outside marriage and adopted children all have the same rights, and there are no age restrictions. However, a child can apply to the court if they feel they have not been provided for adequately. The court will then decide if the parent has "failed in his moral duty to make proper provision for the child in accordance with his means". "Proper provision" has been described as a duty to house, clothe, maintain, feed and educate the child, ensure medical, dental and chemist's bills are paid for until the child finishes their education, and provide "some provision by way of advancement for them for life".
In Ireland, inheritance tax, also known as capital acquisitions tax (CAT), applies to gifts and inheritances. There are tax-free thresholds for beneficiaries depending on their relationship to the person giving the inheritance. The threshold for children is €400,000.
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Probate and letters of administration
In Ireland, when a person dies, their estate must be administered according to their will, or if they have not left a will, according to the rules of intestacy. This process involves collecting their assets, paying off any debts and taxes, and distributing their estate to the beneficiaries.
Probate is the legal process of administering a person's estate after their death. It involves proving the validity of the will, identifying and valuing the estate, paying any taxes and debts, and distributing the estate to the beneficiaries. The Probate Office will help with the probate process, but it cannot provide legal advice, and the administrator is responsible for completing the necessary documentation.
Letters of Administration is a document that authorises an administrator to manage the estate of a person who has died without leaving a will intestate. The administrator is usually the next of kin and needs to provide an administration bond to the Probate Office, guaranteeing that they will carry out their duties properly.
Application Process
Applications for probate or letters of administration can be made at the Probate Office or a District Registry if the deceased had a fixed place of abode within that district. The application can be made through a solicitor or in person. Certain specialised applications may require a Court/Probate Officer's Order.
The process of administering an estate can be complex, and it is recommended to seek legal advice. The Citizens Information Phone Service and the Law Society of Ireland can provide further guidance on the administration of estates.
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Transferring money internationally
I could not find specific information on whether banks are notified of inheritances received in Ireland. However, I did find information on transferring money internationally.
There are several ways to transfer money internationally. The method you choose will depend on the amount you want to send, the destination, and how quickly you need the transfer to be completed. Here are some options:
- Online Transfer Services: You can use online transfer services such as Wise, Revolut, Remitly, CurrencyFair, or XE. These services typically offer competitive exchange rates and low fees for international money transfers. They provide a convenient and secure way to send money abroad, often with the option to send and receive funds through their websites or mobile apps.
- Traditional Banks: Traditional banks, such as Bank of Ireland, also offer international money transfer services. For amounts up to €20,000, you can use their online platform, 365 online, or their mobile app. Bank of Ireland does not charge payment fees for international payments to the UK, EU member states, and EEA countries. However, there is a €5 fee for countries that require FX conversion. For amounts over €20,000, you may need to fill out a form and visit your local bank branch.
- Foreign Exchange Brokers: Foreign exchange brokers often provide competitive exchange rates and can be a good option for larger transfers. However, it is important to note that you may not have the same level of protection as you would with a regulated bank if something goes wrong.
- Money Transfer Companies: Companies like Western Union and MoneyGram specialize in quick money transfers. They offer the option to send and receive cash online, through their apps, or via their high street branches.
- PayPal: PayPal supports international money transfers to over 200 countries, but their fee structure can be complex, and costs can add up quickly.
It is important to consider factors such as exchange rates, transfer fees, security, and transfer speed when choosing a money transfer service. Additionally, always ensure that the service you choose is regulated to protect your funds in case of any issues.
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Frequently asked questions
No, the beneficiary does not need to notify the bank. However, the bank will likely be informed by the institution transferring the inheritance.
The deceased person's money and possessions are dealt with according to their will. If there is no will, the beneficiary must apply for a Grant of Representation within six months. The spouse or civil partner has the right to choose between a legal right share and keeping the family home.
CAT is a tax charged on money or property that is inherited or received as a gift. The tax rate in 2025 is 33%, and it is the beneficiary's responsibility to pay it. There are exemptions for inheritances from spouses or civil partners and gifts under €3,000.
You can set up an account with a global money transfer company like Currencies Direct or Fexco to transfer your inheritance to a bank in your home country. You may need to convert the Euros into your home currency.
