Inheritance Process: What Happens When an Irish National Dies Owning Property Abroad
Introduction
An Irish citizen’s death can set in motion a complex web of legal and tax obligations, especially when the estate includes property located outside of Ireland. Whether the asset is a holiday home in Spain, a rental apartment in the United Kingdom, or a villa in the United States, the inheritance process must juggle Irish Capital Acquisitions Tax (CAT), foreign inheritance taxes, and the probate rules of each jurisdiction.
For Irish expats, residents, and investors, understanding these intersecting rules can mean the difference between a smooth transfer of assets and costly delays. This article breaks down:
- How Irish CAT is calculated on overseas property
- When and how foreign inheritance tax applies
- The role of double‑taxation treaties and foreign tax credits
- The probate steps required in Ireland and abroad
- Practical tips for executors and beneficiaries
By the end, you’ll have a clear roadmap for navigating cross‑border inheritance and protecting your loved ones from unnecessary tax exposure.
1. Irish Inheritance Tax (Capital Acquisitions Tax) – The Home Base
1.1 CAT thresholds for 2025
| Beneficiary group | Tax‑free threshold (2025) |
|---|---|
| Group A (children, grandchildren, lineal descendants) | €500,000 |
| Group B (siblings, nieces/nephews, lineal ancestors) | €100,000 |
| Group C (all others) | €75,000 |
Source: Revenue Commissioners, “CAT thresholds, rates and aggregation rules”, 2025.
If the value of the inherited overseas property, combined with any other assets received from the same donor, exceeds the relevant threshold, the excess is taxed at 33 % (the standard CAT rate). The valuation must be the fair market value on the date of death.
1.2 Valuing foreign property
- Professional appraisal – A local, certified valuer in the country where the property sits is the safest route.
- Comparable sales – If a valuation is unavailable, recent sales of similar properties in the same area can be used.
- Exchange rates – Revenue requires the value in euros, converted at the ECB spot rate on the date of death (or the average of the month if the exact date is unavailable).
2. Foreign Inheritance Tax – What the Host Country May Claim
2.1 Common jurisdictions and rates (2024‑2025)
| Country | Typical inheritance tax rate* | Exemptions / allowances |
|---|---|---|
| United Kingdom (England & Wales) | 0 % – 40 % (depending on relationship & size) | Nil‑rate band £325,000 (≈ €380,000) |
| Spain (Catalonia) | 7 % – 34 % | 100 % exemption for spouses; 9 % for direct descendants |
| United States (federal) | 0 % – 40 % (estate tax) | Unified credit €12 million (≈ US$13 m) – only large estates |
| France | 0 % – 60 % | €100,000 exemption for children; €0 for unrelated heirs |
| Portugal | 0 % – 10 % | €500,000 exemption for spouses & descendants |
*Rates vary by region, relationship, and size of the estate. Always verify the latest local legislation.
2.2 When does foreign tax apply?
- Domicile of the deceased – Many countries tax based on the decedent’s domicile (e.g., Spain).
- Location of the asset – Some jurisdictions levy tax where the property is situated, irrespective of domicile (e.g., the UK).
- Treaty provisions – Double‑taxation treaties can either exempt the foreign tax or allow a credit against Irish CAT.
3. Double‑Taxation Treaties and the Foreign Tax Credit
Ireland has treaties with over 70 states, including the UK, Spain, France, Portugal, and the US. The key provisions for inheritance tax are:
| Country | Treaty mechanism | Practical effect |
|---|---|---|
| United Kingdom | Credit (Article 22) | Irish CAT can be reduced by the amount of UK inheritance tax paid, subject to a ceiling equal to the Irish tax due on the same asset. |
| Spain | Exemption (Article 13) | Spanish inheritance tax is payable, but the Irish tax authority will grant a credit for the Spanish tax, eliminating double taxation. |
| United States | No specific inheritance treaty | Irish CAT applies; a foreign tax credit may be claimed under the “Credit for Double Taxation” rules, but only if the US tax is actually levied. |
How the foreign tax credit works
- File a CAT return (Form IT38) and declare the overseas asset.
- Attach evidence of foreign tax paid (e.g., tax assessment, receipt).
- Complete Schedule D – “Credit for Double Taxation” – to claim the credit.
- The credit cannot exceed the Irish CAT liability on that asset. Any excess is lost.
Example: An Irish child inherits a €400,000 Spanish villa. Spanish inheritance tax due is €30,000. Irish CAT on €400,000 (after €500,000 threshold) is €0, so no Irish tax is payable, but the credit is irrelevant. If the asset were €600,000, Irish CAT would be 33 % of €100,000 = €33,000. The €30,000 Spanish tax credit reduces the Irish liability to €3,000.
4. Probate – From Ireland to the Foreign Jurisdiction
4.1 Irish probate basics
- Grant of Probate – Issued by the High Court after a will is proved or intestacy is determined.
- Executor’s duties – Collect assets, settle debts, file CAT returns, and distribute the residue.
4.2 “Resealing” a grant abroad
When an estate contains foreign assets, the Irish grant often needs to be resealed (or recognised) in the country where the property is located. The process varies:
| Country | Resealing requirement | Typical documents |
|---|---|---|
| United Kingdom | Usually no resealing – an Irish grant is accepted under the UK‑Ireland reciprocal probate agreement. | Original grant, certified copy of will, death certificate. |
| Spain | Yes – a “Declaración de Herederos” (declaration of heirs) is required, plus a “Certificado de Sucesión” from Irish courts. | Irish grant, translation into Spanish, death certificate, proof of identity. |
| Portugal | Yes – Portuguese courts require a “Certidão de Sucessão”; the Irish grant is accepted after translation and apostille. | Same as Spain, plus Portuguese tax identification number. |
| United States (state‑specific) | Varies – most states accept a foreign probate order after an apostille and translation. | Grant, death certificate, will (if any), state‑specific affidavit. |
Key steps for executors
- Obtain an apostille from the Irish Department of Foreign Affairs for the grant of probate.
- Translate the grant (and any will) into the official language of the foreign jurisdiction.
- Engage a local solicitor familiar with that jurisdiction’s probate law.
- File the resealing application and any required inheritance tax returns locally.
4.3 Timeframes
- Ireland – 4–8 weeks for a straightforward grant (no disputes).
- UK – 2–4 weeks after submitting the resealing documents.
- Spain/Portugal – 6–12 weeks, often longer if the tax authority requests additional information.
Delays can increase costs (legal fees, storage, mortgage interest) and may affect the market value of the property.
5. Practical Checklist for Executors of Cross‑Border Estates
| ✅ | Action | Why it matters |
|---|---|---|
| 1 | Locate the original will (if any) and any codicils. | Determines who is entitled and whether foreign assets are covered. |
| 2 | Identify all overseas assets – property titles, bank accounts, shares. | Prevents hidden assets that could attract tax or cause disputes. |
| 3 | Obtain death certificates – Irish and, where required, foreign equivalents. | Required for probate and tax filings in each jurisdiction. |
| 4 | Secure professional valuations (local valuer). | Ensures accurate CAT calculation and fair market sales price. |
| 5 | Check double‑taxation treaties for each country. | Determines whether you can claim a foreign tax credit or exemption. |
| 6 | Apply for an apostille on the Irish grant of probate. | Makes the document legally recognised abroad. |
| 7 | Translate documents (grant, will, title deeds) into the local language. | Mandatory for most non‑English jurisdictions. |
| 8 | Engage a local solicitor in each foreign jurisdiction. | Saves time, avoids procedural errors, and ensures compliance. |
| 9 | File CAT return (IT38) and claim foreign tax credit within 6 months of the grant. | Avoids interest and penalties on Irish tax. |
| 10 | Pay any foreign inheritance tax before transferring the asset. | Prevents the foreign tax authority from placing a lien on the property. |
| 11 | Consider selling vs. retaining the overseas property. | Weighes market conditions, maintenance costs, and tax implications. |
| 12 | Maintain detailed records of all communications, receipts, and translations. | Essential if Revenue audits the estate. |
6. Common Pitfalls and How to Avoid Them
| Pitfall | Consequence | Prevention |
|---|---|---|
| Assuming Irish probate alone is sufficient | Asset may be frozen abroad, leading to loss of rental income. | Verify resealing requirements early; start the foreign probate process concurrently. |
| Ignoring exchange‑rate fluctuations | Over‑ or under‑paying CAT. | Use the ECB spot rate on the date of death; lock in the rate if filing is delayed. |
| Failing to claim foreign tax credit | Paying double tax (up to 33 % extra). | Keep all foreign tax assessments and receipts; file Schedule D with IT38. |
| Overlooking local inheritance exemptions | Paying unnecessary tax (e.g., spouse exemption in Spain). | Consult a local tax adviser to apply all available deductions. |
| Delaying valuation | Property value may rise, increasing tax liability. | Obtain a valuation as soon as death is registered. |
| Not updating the will to reflect jurisdictional choices | Potential conflict between Irish law and foreign succession rules. | Include a choice of law clause in the will (e.g., “Irish law shall apply to all my assets, wherever situated”). |
7. Illustrative Scenarios
Scenario 1 – Irish parent leaves a €600,000 holiday home in Spain to a child
| Step | Action | Tax outcome |
|---|---|---|
| 1 | Valuation of the villa at €600,000 (ECB rate €0.92/£ on 12 Nov 2025). | |
| 2 | Irish CAT: €600,000 – €500,000 threshold = €100,000 × 33 % = €33,000. | |
| 3 | Spanish inheritance tax: 7 % on €600,000 = €42,000 (after applying child exemption). | |
| 4 | Claim foreign tax credit: Irish CAT reduced by €33,000 (capped at Irish liability). | Irish tax payable €0, Spanish tax €42,000 must be settled. |
| 5 | Reseal Irish grant in Spain – submit apostilled grant, translated will, valuation. | Property transferred to child after Spanish tax clearance. |
Scenario 2 – Irish expat dies owning a rental flat in London worth £250,000
| Step | Action | Tax outcome |
|---|---|---|
| 1 | Convert to euros: £250,000 × €1.17 = €292,500. | |
| 2 | CAT threshold for Group A is €500,000 → no Irish CAT. | |
| 3 | UK inheritance tax: nil‑rate band £325,000 → no UK IHT. | |
| 4 | No double‑taxation credit needed. | |
| 5 | Irish grant is accepted in the UK without resealing; executor can instruct the UK solicitor to transfer title. | Quick transfer, no tax payable. |
These examples show how the interaction of thresholds, exchange rates, and treaty provisions can dramatically alter the tax bill.
8. Why Professional Advice Is Crucial
- Legal nuances – Each jurisdiction has its own probate terminology (e.g., “Declaración de Herederos” in Spain). A mistake can invalidate the transfer.
- Tax optimisation – Strategic use of exemptions, joint ownership, or trusts can minimise both Irish CAT and foreign tax.
- Time‑sensitive filings – Irish CAT returns are due within six months of the grant; foreign tax returns often have their own deadlines. Late filings incur interest and penalties.
- Currency risk management – Professionals can advise on hedging strategies if the estate’s value is volatile.
A coordinated team—Irish solicitor, local foreign solicitor, and a tax adviser familiar with both jurisdictions—offers the best chance of a smooth, cost‑effective inheritance process.
Conclusion
When an Irish national passes away owning property abroad, the inheritance journey moves beyond the familiar terrain of Irish CAT. Executors must navigate:
- Valuation and CAT calculation using Irish thresholds.
- Foreign inheritance tax obligations in the country where the asset sits.
- Double‑taxation treaties that either exempt or allow a credit against Irish tax.
- Probate resealing procedures, which differ markedly between the UK, Spain, Portugal, the US, and other jurisdictions.
By following the practical checklist, engaging local experts, and making use of treaty provisions, families can avoid double taxation, reduce delays, and honour the wishes of the deceased with confidence.
If you are an executor or beneficiary facing an overseas property in an Irish estate, start by securing the grant of probate, obtain professional valuations, and reach out to a solicitor experienced in international probate. The sooner you act, the smoother the transition for your loved ones—and the fewer unexpected tax bills you’ll encounter.