Stay-at-home son entitled to relief from inheritance tax

If both parents die and leave the family home to their son who has always lived in the house (which is worth €320,000) as his principal private residence, and they also leave him €150,000, does the son pay 33 per cent tax on the €150,000?

Ms B.S., email

Assuming the son has no other property, it seems to me that he’ll have no tax to pay at all.

He would be entitled to dwelling-house relief on the basis he doesn’t own any other property and has been living in the property with his parents for at least the three years before he inherits.

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He would have to continue living there for another six years, or use all the money for selling it to buy another home.

If that all applies, it means the family home is taken out of the tax equation entirely – regardless of what it is worth.

For tax purposes, he is then inheriting €150,000 in your example. As this is below the €320,000 tax exempt threshold applying for a child inheriting from a parent, he should have no tax bill. That changes only if he has previously received major financial gifts from the parents that take him above the new €320,000 threshold.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.