When administering an Irish estate, Executors often face additional responsibilities where non-resident beneficiaries are involved.
A non-resident beneficiary is any person who inherits from an Irish estate but does not reside in Ireland for tax purposes. This situation can create extra steps and obligations for the Executor, particularly around Revenue requirements and Capital Acquisitions Tax (CAT).
Understanding these obligations at the outset can help avoid delays and ensure the estate is distributed correctly.
Executor Obligations
All beneficiaries must have an Irish PPS number
The Executor is required to state the name, address, and Irish PPS number of each beneficiary of the Irish Estate on the Revenue Statement of Affairs Form that is submitted to the Probate Office. If a non-resident beneficiary does not have an Irish PPS number, then they must apply to the Department of Social Protection in Ireland to obtain a PPS number for the purpose of the probate application. It is therefore important that an Executor obtains PPS numbers for all beneficiaries at the outset to avoid any unnecessary delay with submitting the application to the Probate Office.
Executors are Secondary Liable for the Capital Acquisitions Tax (CAT) of a non-resident beneficiary on the inheritance they receive from the Estate
An Executor is secondary liable regarding any CAT liability payable by a non-resident beneficiary on the inheritance they receive from the Irish Estate. The Executor should ensure that no funds are paid to a non-resident beneficiary until the Executor has received Non-Resident Beneficiary Clearance from Revenue confirming that the Executor can distribute the funds due from the Estate to the non-resident beneficiary. The Executor must apply for Non-Resident Beneficiary Clearance even if the non-resident beneficiary does not have a CAT liability to pay on the inheritance they are receiving. If the non-resident beneficiary does have a CAT liability, the beneficiary must file and pay their CAT liability before Revenue will grant clearance to the Executor to distribute the funds to the beneficiary.
Advice for Executors
Dealing with non-resident beneficiaries can be complex, and Executors must take care to meet all legal and tax obligations before making any distributions. By securing PPS numbers early and obtaining the necessary Revenue clearance, Executors can minimise delays and protect themselves from potential liability.
If you are an Executor of an estate with non-resident beneficiaries, it is advisable to seek legal guidance to ensure everything is managed smoothly and in compliance with Irish law. For advice tailored to your situation, please contact Sally-Ann McCoy at Dillon Solicitors LLP on 01 296 0666.
