Section 72 Life Assurance Policy Ireland_ Everything You Should Know!

Section 72 policy Ireland is often hailed as a valuable tool for estate planning. Formally known as Section 60 insurance in Ireland, Section 72 is an approved, whole-of-life policy, the proceeds of which are tax-free if used to pay an inheritance tax bill. A section 72 policy Ireland gives you the opportunity to plan for the payment of inheritance tax in Ireland efficiently and in advance. Specifically enacted with the sole purpose of paying Capital Acquisition Tax (CAT), they are considered the cornerstone of estate planning.

About Money Maximising Advisors

Money Maximising Advisors Limited, a trusted financial consultancy firm, operates in Galway, Dublin, Cork, Kildare, and Limerick. Our expert advisors offer personalized financial solutions to help you achieve your wealth and investment goals. Let us guide you towards financial success with our proven strategies and tailored advice.

Policy Policy Ireland Section tax inherit tax bill

About Money Maximising Advisors

Policy Policy Ireland Section tax inherit tax bill

Section 72 Life Assurance Policy
Ireland: Everything You Should Know!
Section 72 policy Ireland is often hailed as a valuable tool for estate planning. Formally
known as Section 60 insurance in Ireland, Section 72 is an approved, whole-of-life policy,
the proceeds of which are tax-free if used to pay an inheritance tax bill.
A section 72 policy Ireland gives you the opportunity to plan for the payment of inheritance
tax in Ireland efficiently and in advance. Specifically enacted with the sole purpose of paying
Capital Acquisition Tax (CAT), they are considered the cornerstone of estate planning.
Section 72 life insurance policy allows people to avoid incurring potentially life changing and
usually unexpected tax demands upon the inheritance of a property or asset. As per Irish
Law, the beneficiary of the estate is liable to pay the taxes – and not the disponer.
Maybe you’ve heard of a friend or relative who inherited a property upon the death of their
parents, only to be issued with a hefty Capital Acquisitions Tax (CAT) bill. But often, what
happens is that people who inherit a property are ultimately forced to sell the property just to
cover up the insurance tax bill. This not only affects emotionally but also financially.
Unfortunately, many people who can benefit from Section 72 policy Ireland don’t even know
about its existence. Therefore, we have taken this opportunity to help you understand
Section 72 Policy Ireland with all the required details.
How Does Section 72 Policy Ireland Work?
Let’s understand the workings of Section 72 policy with an example:
Assume you are a parent who owns a property with a value of €500,000. Naturally, your
child will inherit it from you. As time comes, and the ownership of the property passes over
to your child (beneficiary) they have to pay Capital Gains Tax (CGT) over the individual
threshold of €335,000. The current CCT rate is 33%.
So if we calculate and deduct the €335,000 individual threshold – this leaves you with
€165,000 taxable at 33%. This means that the beneficiary of the inheritance (your child
here) has to pay a staggering tax bill of €54,450. And this is just taking into account the
family home.
Requirements For Getting A Section 72 Policy Ireland
The policyholder must be the person leaving behind the inheritance. As a child cannot
insure the life of a parent, they will have to prove to the insurer that they need the Section
72 policy – which can easily be done by showing a copy of the will or proof of assets.
In situations where estates pass over from one spouse to another, or maybe between civil
partners, a joint policy is always recommended because, on the death of the second
spouse, the beneficiaries of the inheritance will be guarded by the Section 72 policy. This
is also known as joint life, second death. This will ensure that the second spouse can have
Inheritance tax relief on the transfer of assets from one spouse to another following death.
Why Should I Take Section 72 Policy Ireland?
To put it in simple words, Section 72 Policy Ireland can help you save a lot of money and
potential headaches. Imagine how your children would feel if they had to sell their childhood
home, on a short note, just to settle a tax bill. And Section 72 policy counters the need for
this.
If you are about to receive a large inheritance, this policy can be highly beneficial. A smart,
quick way to plan the future of your beneficiaries is by taking a few simple steps today.
For parents, they should consider this policy with their children in mind. Children in their 30s
and up must consider Section 72 life insurance policy for their future.
With the whopping increase in property prices in Ireland, more and more people are
resorting to smart and sensible financial and estate planning. Curate an actionable financial
and retirement plan with the help of expert financial advisors from Money Maximising
Advisors Limited. Hope it helps!
Talk to us at +353 91 393 125
Mail us at office@mmadvisors.ie
Or visit our office at Unit 3, Office 6, Liosban Business Park, Tuam Rd, Galway, Ireland
Read Also- Redundancy Advice Kildare – The Ultimate Guide