Estate planning
Estate tax planning
We work with clients on an ongoing basis in relation to planning the transfer of wealth to the next generation. This is often complicated by cross-border issues and requires liaising with advisers in other jurisdictions to develop strategies that work tax efficiently.
Lifetime estate tax planning
The optimum time to consider estate planning is as soon as excess wealth starts to accumulate. Strategies to facilitate the growth of asset value in the hands of the next generation can be considered as a way to alleviate and manage the future tax burden. The legal aspects around this need to be carefully considered and advised on separately. Certain structures can allow for control to be retained over assets even though the growth in the value of the assets will belong to the next generation.
Targeting specific tax reliefs on transferring value to the next generation is also something to consider, and this is particularly relevant where there are business assets, farming assets or shares in trading companies. In circumstances where parents live with children the dwelling house exemption may eliminate an inheritance tax charge on a family home or there can be other options around property ownership that facilitate a future tax efficient transfer to the next generation.
Often, advice on planning the tax efficient transfer of wealth to the next generation looks at the tax impact of lifetime gifting versus passing assets on by Will. As part of this, KTA Tax collaborates with lawyers drafting Wills to optimise the tax position overall.
Post death estate planning
Although the optimum time to consider estate planning from a tax perspective is prior to assets passing by way of inheritance, there are sometimes certain steps that can be taken in the course of administration of an estate to redistribute wealth in a tax efficient manner. This should ideally be considered prior to taking any steps in administering an estate.
Cross borders estates
Double Taxation Agreements with the UK and US are relevant where there is a US / UK dimension and, with the US in particular, complicated trust structures can increase the tax complexity in Ireland. However, there are also opportunities for Irish inheritance tax exemptions under the Ireland / US inheritance tax treaty where certain conditions are met for US based assets. This can eliminate an Irish inheritance tax exposure. KTA Tax is experienced in advising on the Irish inheritance tax position in such circumstances.
KTA Tax is also experienced in dealing with complicated inheritance tax computations relating to the Ireland / UK inheritance tax treaty and claiming a credit for UK inheritance tax in Irish inheritance tax returns, where available.
Trusts
Trusts can, from a legal perspective, form an important part of estate tax planning both in an Irish context and an international context. For example, a trust could be put in place on the advice of lawyers to protect vulnerable beneficiaries, to reduce tax exposure or facilitate planning around the timing of tax events.
KTA Tax is experienced in dealing with the tax position of both trustees and the beneficiaries of trusts.