Hi if an intestacy estate has a property only and the family consists of mum and two adult children, is it possible to do a deed of variation leaving property to mum? In this situation it will mean there’s no inheritance tax to pay if a DOV is put in place.
It is possible to vary an intestate estate.
Yes - s.142(1)(a) IHTA 1984 expressly provides for the variation of the dispositions of an estate “whether effected by will, under the law relating to intestacy or otherwise”
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Agree with comments above.
If the property was owned by mother and father as joint tenants then on father’s death his share would automatically pass to mother; in which case no need for a DoV.
What was the property worth?
Malcolm Finney
Thank you.
Another question if someone is domiciled in Ireland but has property in uk and Ireland and paid inheritance tax in instalments on uk property will they to pay inheritance tax in Ireland too? Also if I obtain a uk grant can this be resealed to use in Ireland?
If a person is domiciled in Ireland and not in the UK, the primary right to tax lies with Ireland ie the country of the person’s domicile. Wrt land situated in the UK, UK IHT is leviable albeit with an offsetting credit against any Irish charge thereon. These are the principles; the exact terms of the Irish/UK IHT DTA needs to be consulted.
Malcolm Finney
I understand Ireland’s equivalent of IHT is Capital Acquisitions Tax, and that credit should normally be given for IHT payable in the UK. I further understand that a grant/confirmation issued within the UK is not “good” in Ireland and that you will need to obtain a separate grant there.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Thank you for your reply. The client instructed a solicitor in Ireland who advised her to complete an IHT 400 and pay the IHT on all assets. She has paid the first instalment on uk property however she now tells me she wants to keep the uk property and sell the property in Ireland. If she has declared instalment option on the UK property can she now keep the property and sell the Irish property?
Having taken a quick look at the UK/Irish IHT DTA, its terms are not quite as I suggested above.
In principle each country retains the right to tax which it has under its domestic law subject to contrary provisions in the DTA. If tax is payable in both countries (which would apply to UK situs land) relief is provided. Each country is required to give a credit against its own tax if the property is situated in the other country (ie Ireland is required to give a credit for UK IHT payable on UK situs land).
As a non-UK domiciled individual (ie solely domiciled in Ireland) UK IHT is not payable (as seems to be suggested by the solicitor) on non-UK situs property; such property presumably would be subject to Irish equivalent IHT.
Where the instalment basis has been elected for UK IHT all outstanding IHT would become payable should the UK land be sold.
Malcolm Finney
Hi Paul thanks for your reply. Can I ask another quick question- can you serve a Notice of Severance on a husband in a care home that has dementia? The wife wants to leave her estate to her children ie 50% share of property she doesn’t feel this is a deprivation of assets as he will still have his 50% share of the property.
I see no reason why a notice of severance cannot be served on the other joint tenant irrespective of the health of the recipient. Even though the recipient joint tenant will presumably be unable to comprehend the nature of the document served this should not invalidate the actual severance.
Whether any deprivation of assets arises is a separate question.
Malcolm Finney