What is the status of grandchildren in relation to inheritance tax?

Q&A: Dominic Coyle

There are three different categories for inheritance tax. Photograph: iStock

There are three different categories for inheritance tax. Photograph: iStock

 

What is the status of grandchildren in relation to inheritance tax?

Mr D.Q., email

There are three different categories for inheritance tax:

Category A: From a parent to a child generally;

Category B: From one linear relation to another – ie to a sibling, a grandchild or a niece or nephew;

Category C: Strangers – everyone else, including cousins, in-laws or friends.

The relevant current tax-free lifetime thresholds are: €310,000 (A); €32,500 (B); and €16,250 (C).

As you can see from that, grandchildren are generally in category B.

However, the minor children of deceased children – ie any grandchild you have under the age of 18 whose own parent is your child but has predeceased you – is treated as Category A and so is eligible for the higher €310,000 threshold.

Anything above those amounts, depending on the personal circumstances, is liable to tax at 33 per cent.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.

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