If you care about leaving your hard-earned wealth to your family (rather than to the Internal Revenue Service in the form of a large tax bill), you need to understand what Congress is proposing. In Ireland, where the taxman’s bite on inheritance is substantial, the approaches can make the difference between full control over how an estate is spent and one that is limited to state-sanctioned terms of administration.
In this guide, we’re going to take an in-depth look at what a Section 73 Savings Plan is and how it can help you make more of your legacy land in the hands of those who matter to you the most. At the very least, whether you are new to the game or a more experienced player hoping to refine your existing strategy, you’ll find some pointers here that could alter the way you think about inheritance planning.
Paying Inheritance Tax in Ireland
Inheritance Tax in Ireland (IHT) is an important part of estate planning in Ireland. It’s called Capital Acquisitions Tax (CAT) and it’s charged on assets that you could have inherited from someone who died.
The tax is levied at a flat rate of 33%. This means include will be taxed on amounts above the tax-free threshold. The cutoffs differ based on the decedent-beneficiary relationship.
But many people don’t think about section 73 policy inheritance tax until it’s too late and are hit by a bill they never saw coming. By knowing about CAT, people could prepare and deal with their estates in a planned way.
“Good planning can help families protect money down the generations and limit potential liabilities to inheritance tax.”
Benefits of a Section 73 Savings Plan
There are several benefits to Section 73 Savings Plans and tax efficiency is key. This will enable you to build up a pot that can be passed on to your heirs free of inheritance tax.
And there is flexibility in how you structure your contributions. You can choose how on a regular basis and the amount, so you are more likely to fit it into your finances.
Another advantage is growth through investments etc an option only. Your money, as it piles up, can potentially grow more rapidly to enhance your total amount of savings.
Also, there’s peace of mind, possessing a plan such as this. Having the peace of mind to know that you are making prudent plans to protect your family from future inheritance tax liabilities is priceless. You can customise these plans for all kinds of tastes and they still make sense as life changes.
Contact Money Maximising Advisors and explore with our specialists the benefits of Section 73 policies.
Qualification for the Section 73 Savings Plan
Applicants must meet certain requirements laid down by the Irish Revenue in order to be eligible for a Section 73 Savings Plan.
- Applicants are usually 18 years or older, although minors under parents’ authority are exceptions.
- Residency status matters too. It does require applicants to be tax residents in Ireland for full benefit. I’m talking to residents — both citizens and legal perms.
- In addition, it’s important to make sure any current policies are compliant with the rules laid out in section 73 income tax act. Knowing these laws and regulations will help you in the application process.
- Eligibility checks also include a check on financial health. Having a sustainable income or assets is key to getting the best chance of being accepted for a policy designed to reduce the impact of inheritance tax.
How to Establish a Section 73 Savings Plan
- You’ll need to go to a trusted bank that provides such a plan in the first place. A lot of banks, as well as section 73 insurance policy, will give you the option of options specifically RFC that you need.
- Next, prepare the required documents such as ID and address proof. The following will make the application process run more smoothly.
- After you’ve selected a provider, visit for a personal consultation. An adviser like Money Maximising Advisors can also talk you through the nuances of the plan, such as contributions and expected returns.
- Once you have a good understanding of these details, fill out the application that the institution of your choice gives you. Make sure to get your questions cleared before putting the pen to the paper.
- Pay your first contribution to start your savings plan. Consistent deposits are essential to reap as many rewards as possible over time.
Constraints and Considerations
Although the Section 73 Savings Plan is attractive, you should understand that it is limited. Although tax benefits could be derived from these plans, they sometimes come with a lot of rules and guidelines that could limit their flexibility.
The total you can invest is usually restricted, making it harder for gains to keep up with other investment options. Withdrawals premature to the specified term may be subject to penalties or diminish the total advantages.
Then there are the issues of eligibility for participation in such plans. Not everyone is eligible based on income levels or existing financial obligations.
And keep in mind that although savings you’ve made on section 73 policy inheritance tax will be generous, your final payout can be affected by market fluctuations. As with all financial Section 73 Investment Advice, always consult your Money Maximising Advisors to get individual advice regarding your financial position and the results you’re looking to achieve.
Connect with Money Maximising Advisors to organise a customised Section 73 strategy relevant to your estate planning wishes.
FAQ’s
What does the section 73 plan cover, exactly?
It mostly revolves around minimising inheritance tax exposure.
What do contributions mean for your taxes?
Payments under section 73 policy may be deducted to lower the taxable amount of the estate of which the policy is a part.
How long do you need to keep the policy?
It normally is best to keep it in place until death to maximise benefits.
Conclusion
It can be quite difficult to try to understand inheritance tax in Ireland. However, a Section 73 Savings Plan provides an option to protect their assets and ensure money is available for their heirs. By learning what these Section 73 Savings Policies are and the actions you’ll need to take to establish one, you can potentially slash, if not eliminate, your inheritance tax exposure.
The benefits are obvious: tax efficiency, simple transferability, and comfort in the knowledge that your family will have access to their money without onerous tax consequences. Yes, there are restrictions and things to take into consideration—such as who’s eligible—but it’s also important to weigh these against the benefits.
If you are thinking of arranging a Section 73 Policy Savings Plan or would like to know more about savings plans in Ireland, you should talk to Money-Maximising Advisors, who are experts in these matters. They can help you construct personalised Section 73 Investment Plans that meet your specific needs and remain fully compliant with the applicable laws.
Call Money Maximising Advisors at +353 91 393 125 today and see how a Section 73 Savings Plan can help to reduce the amount of tax your beneficiaries will have to pay.
- Gift/Inheritance Tax Savings Plans: How Do I Avoid Inheritance Tax on My Savings?
- Inheritance Tax Advice In Ireland: Where Can I Get Advice on Inheritance Tax?
- How to Avoid Paying Inheritance Tax in Ireland?
- How can I Reduce My Inheritance Tax in Ireland?
- What is the Most You can Inherit without Paying Taxes?
- Inheritance Tax Q&A: Get Answers To Your Most Pressing Questions About Protecting Your Family’s Inheritance
- Understanding the Tax Implications of Section 73 Policy in Ireland
- Section 72 Policies in Galway, Ireland: What happens if you can’t pay inheritance tax in Ireland?
