Inheritance Tax In light of recent budget changes we have come to acknowledge that C.A.T (Capital Acquisition Tax) is no longer a tax on the wealthy, it now affects a greater number of people due to the reduction in thresholds. C.A.T planning is extremely important as the need for individuals to protect and care for their loved ones does not die when they die. In recent budgets the C.A.T threshold between parents and children has decreased considerably while the tax rate has increased to 33%, so it is the children who are being targeted with an increased tax liability. In the event of death of a loved one the tax bill imposed on beneficiaries can in fact be come quite substantial depending on; the relationship between the beneficiary of the estate and the deceased. The net value of the inheritances received by each beneficiary, and any previous gifts/ inheritances received. Interestingly enough when calculating the value of an estate there are a variety of streams that are taken into account before the value of the estate is decided; Savings Investments Property Pensions Life Assurance Contracts The reduction in the Group A threshold between parents and children leaves children having to pay 33% C.A.T in the event of both parents dying. Having to sell part of an inheritance to meet a tax liability may be a very hard choice to face especially going through the very difficult period following the death of a parent. However through a ‘Section 72‘ policy a cash sum can be provided which will fund the tax liability imposed on the deceased estate. Revenue states that ‘Section 72‘ policies are special policies taken out to discharge inheritance tax, and in turn are exempt from inheritance tax. If you would like to take that extra step to ensure that your estate is protected in the event of death, call us today and we can design a ‘Section 72” policy to safeguard your families future.
