Assets passing on death between married couples or civil partners are exempt from Inheritance Tax. BUT this only applies in the case of ‘legal spouses’ and same sex registered civil partners. All other couples are treated as strangers for Inheritance Tax purposes. The stranger threshold for Inheritance Tax is currently €15,075. Inheritances in excess of €15,075 are subject to tax at 33%.
Will you have to pay inheritance tax on the death of your partner? On the death of a non married partner Inheritance Tax will be payable on the total value of all assets, regardless of how long the couple have lived together. With the possible exception of the family home, where a ‘cohabiting partner’ inherits other property, or a death benefit under an insurance plan, the €15,075 threshold could easily be exceeded.
If you think this affects you I would invite you to contact me with a view to reviewing your family and mortgage protection arrangements to ensure that you and your family receive the proceeds of your life assurance plan when you need it most in the most tax efficient way possible.