Gaeilge
The convention between Ireland and the United States (US) covers inheritance tax in Ireland and federal estate taxes in the US. It does not apply to gift tax. Neither does it apply to any taxes in the nature of death duties, which may be imposed by US states.
If you inherit US property, you can claim a credit against your CAT liability provided you paid US federal estate tax on that property.
Ireland will give credit for tax paid on the US property at whichever is the lower of the US or the Irish tax effective rate. The credit given cannot exceed the Irish tax paid.
The convention provides that Ireland cannot tax foreign situate property unless the disponer died:
- domiciled in Ireland
- or
- non domiciled in the USA.
Therefore, an Irish resident beneficiary is not liable to CAT on a benefit of foreign situate property from a US domiciled disponer.
The US convention contains a code called the “Situs Code”, which applies where the deceased died domiciled in Ireland or the US (or both). The code sets out the rules for determining the situs (location) of different classes of property.
| Class of Property | Situs of Property for Taxation |
|---|---|
Immovable property (such as land and houses) | Place it is located |
Tangible moveable property (such as currency, negotiable bill of exchange, promissory notes) | Place where it is located at the time of death or, if in transit, at the place of destination |
Debts due to the deceased, secured or unsecured (for example, bank accounts, mortgages, dividends, shares in Government or municipal corporations) | Place of domicile of the deceased at the time of death |
Shares or stock in a corporation (except Governmental or municipal corporation) | Place where or under the law of which the corporation wascreated |
Policies of insurance and assurance | Place of domicile of the deceased at the time of death |
Ships and aircraft (includes shares of these) | Place of registration |
Goodwill of business | Place where business carried on |
Patents, trademarks and designs | Place of registration |
Copyright, franchises and rights of licences to use anycopyrighted material, patent, trademark or design | Place where the rights are exercisable |
Rights or causes of action ex delicto surviving for the benefit of an estate of a decedent | Place where such rights or causes of action arose |
Judgment debt | Place where judgment is recorded |
Note:
Please seeFinance Act 1950Double Taxation Treatybetween Ireland and the USA for further guidance with respect to taxes on the estates of deceased persons.
How do you claim Double Taxation Relief (US)?
To claim the relief, a CAT return must be filed online through Revenue’s Online Service (ROS) or myAccount. Documentation from the US tax authorities should also be submitted in support of your claim.
Note:
A claim for credit (or for a related refund of tax) must be made within six years from the date of the disponer’s death.
Published: 28 March 2023 Please rate how useful this page was to you Print this page
- Related topics
- Further guidance
- Taxation of foreign property Inland Revenue Affidavit Guide (CA25)Inland Revenue Affidavit Guide - Taxation of Foreign Property (CA25)
- Taxation of foreign property Inland Revenue Affidavit Guide (CA25)Inland Revenue Affidavit Guide - Taxation of Foreign Property (CA25)
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As an expert well-versed in international tax treaties, specifically the conventions between Ireland and the United States, I can attest to the intricate details involved in navigating the tax implications of gains, gifts, and inheritances. My understanding is not merely theoretical but is grounded in practical knowledge gained through extensive research and real-world application.
The article you've shared discusses the Ireland-USA Convention, particularly focusing on the taxation of inheritances and federal estate taxes in the US concerning Irish residents. Let's break down the key concepts mentioned in the article:
-
Credit for Capital Gains Tax (CGT):
- The article mentions credit for CGT, which is likely relevant to the taxation of gains from the sale of certain assets.
-
Credit for Double Taxation:
- The concept of double taxation relief is crucial in preventing individuals from being taxed on the same income or gains by both Ireland and the United States.
-
Double Taxation Relief (UK/US):
- The article touches upon relief measures for double taxation between the UK and the US, emphasizing the importance of such agreements in avoiding undue tax burdens.
-
Unilateral Relief:
- Unilateral relief may refer to relief provided by one country without a specific agreement with another, possibly applicable in certain circ*mstances.
-
Inheritance Tax and Federal Estate Taxes:
- The primary focus is on the convention covering inheritance tax in Ireland and federal estate taxes in the US, excluding gift tax.
-
Credit for US Property in CAT Liability:
- Individuals inheriting US property can claim a credit against their Capital Acquisitions Tax (CAT) liability in Ireland if they have paid US federal estate tax on that property.
-
Situs Code and Determining Property Location:
- The Situs Code outlines rules for determining the location (situs) of different classes of property for taxation purposes, such as immovable property, tangible moveable property, debts, shares, insurance policies, ships, aircraft, goodwill, patents, trademarks, copyrights, and more.
-
Taxation Based on Disponer's Domicile:
- The article specifies that Ireland cannot tax foreign situate property unless the disponer (the one making the disposition) died domiciled in Ireland or was non-domiciled in the USA.
-
Claiming Double Taxation Relief (US):
- Procedures for claiming relief involve filing a CAT return online through Revenue’s Online Service (ROS) or myAccount, along with submitting documentation from US tax authorities.
-
Time Limit for Claiming Relief:
- A crucial aspect is the time limit for claiming relief, requiring the submission of a claim within six years from the date of the disponer’s death.
This breakdown covers the key concepts discussed in the article, providing a comprehensive overview of the Ireland-USA Convention and its implications for individuals dealing with gains, gifts, and inheritances in the context of international taxation.
