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Valuation date and the value of benefits

  1. Overview
  2. What is the valuation date?
  3. Limited interest
  4. Rights of residence
  5. Annuities and other periodic payments
  6. Free use of property and interest free loans

Limited interest

If you inherit less than the full or absolute ownership of a gift or inheritance it is called a limited interest. You may inherit a limited interest for life, or for a specified time.

The taxable value of a limited interest is less than the taxable value of a full or absolute ownership or interest. The taxable value of a limited interest depends on:

  • your age and gender, in the case of a life interest
  • the number of years you have inherited for, if this is a specified time.

To calculate the taxable value of a limited interest you need to refer to Schedule 1, Capital Acquisitions Tax Consolidation Act, 2003. This outlines the rules for calculating the taxable value for:

  • joint lives
  • the longer of two or more lives
  • an interest that is guaranteed for a specified time.
  • Example 1

    Absolute interest

    Mary inherits €100,000 in stocks and shares on condition that she donates €15,000 to charity. The costs and expenses of the estate are €10,000.

    Taxable value of Mary's interest
    DetailAmount
    market value of property €100,000
    minus costs and expenses €10,000
    value €90,000
    minus donation to charity €15,000
    taxable value €75,000
  • Example 2

    Life interest

    Brian is 37 years old. He takes a life interest of investments valued at €500,000 from Carmel on condition that he pays Carmel's niece €2,000. The costs are €1,200.

    Taxable value of the Brian's interest
    DetailAmount
    market value €500,000
    minus costs €1,200
    value €498,800
    multiply by appropriate age factor (0.8626) €430,265
    minus payment to niece €2,000
    taxable value €428,265
  • Example 3

    Interest for a specified time

    Michael transferred a house to his brother Alan until his niece, Lucy, reaches 21 and the house will be hers. She will be 21 in five years and 99 days. The market value of the house is €100,000. Costs paid by Alan are €3,000.

    Taxable value of Alan’s gift
    DetailAmount
    market value €100,000
    minus costs €3,000
    value €97,000
    multiply value by factor for 5 years (.2869) €27,829
    multiply value by factor for 6 years (.3335) €32,350
    subtract €27,829 from €32,350 €4,521
    value for 99 days:  
    €4,521 divided by 365 and multiplied by 99 €1,226
    plus value for 5 years €27,829
    taxable value €29,055

Next: Rights of residence

Published: 17 May 2017 Print this page

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