Qualifying expenses for permanently incapacitated beneficiaries

Did you know that if you make a gift or leave an inheritance for the purpose of discharging the “qualifying” expenses of a person who is permanently incapacitated by reason of physical or mental infirmity, then this gift or inheritance is exempt from capital acquisitions tax?

In order to qualify for this important exemption the intended beneficiary must be permanently incapacitated. The gift or inheritance must be used to pay for their qualifying expenses. These are expenses related to medical care including the cost of their maintenance in connection with that medical care.

In order to qualify for the relief, the Revenue Commissioners must be satisfied that the gift or inheritance has been or will be applied for the purpose of paying for medical care for the person. When making the gift or leaving an inheritance in your will you should ensure that your intention in providing the gift or inheritance is stated clearly. This would be the best evidence to satisfy the Revenue Commissioners.

Given the importance of ensuring that people with a disability receive the best care possible care, it should be taken into account when making such gifts or inheritances so that this exemption will apply.

If you have any queries in relation to any of the above, please do not hesitate to contact Owen Burke, associate solicitor and Trust and Estate Practitioner at o.burke@beauchamps.ie.