Q Myself and my sister are due to inherit one-third of my late father's residence. My father had a partner, who has been left an exclusive right of residence until she dies. If myself and my sister were to accept a buyout from his partner, how much could we expect to receive from the property value of around €300,000? Also, can you explain to me the percentage rate at which the exclusive right is calculated please?
A The website of the Revenue Commissioners indicates that the tax authority will accept 10pc of the market value of a property as the value of a right of residence, or 20pc where there is a right of residence together with support and maintenance, according to solicitor Susan Murphy of MakeMyWill.ie.
However, where it is an exclusive right of residence, the benefit is treated as a limited interest for inheritance tax purposes, and the value is calculated by reducing the market value of the property in accordance with the rules and tables set out in Schedule 1 of the Capital Acquisitions Tax Consolidation Act, 2003, she said.
The benefit is treated as a limited interest for inheritance tax purposes
Age and gender are taken into account by the tax officials in the Revenue Commissioners to determine the value of your father’s limited interest, Ms Murphy said.
You are advised to consult a solicitor before making any moves in relation to the property.
Q I have never considered an income protection insurance policy as something I would need until my friend had an accident and was out of work for nine months with a back injury. He has advised me to think about protecting my income as I am self-employed, but I don’t know how it works. Would it be a good idea, and can I get this cover if I am self-employed?
A Getting income protection is one step you could take to provide a financial safety net if you were unable to work due to illness or injury.
Typically, those who are self-employed don't have the protection of statutory sick pay in the event they are too ill or injured to work and it’s for this reason that you should consider taking out an income protection policy, according to Siocha Costello of insurance and investment provider Aviva.
Eligibility and cost are determined by your occupation and by your medical history. You can insure up to 75pc of your annual income and your income protection plan will pay you a replacement income if you can’t do your job due to any accident or illness for longer than your chosen deferred period, meaning the amount of time you must wait before you start receiving claim payments.
Eligibility and cost are determined by your occupation and by your medical history
The insurer will pay you until you get back to work or reach your chosen retirement age, Ms Costello said.
You can get tax relief on your premiums and your company can pay your premiums if you are a director without triggering a benefit-in-kind tax liability.
She recommends you speak to a financial broker to help you get the right plan to suit your needs.
Q For the past two-and-a-half years I have been earning a salary of €35,000. Last week I handed in my resignation as I got a better offer elsewhere and my current work environment is toxic. My employer counter-offered, promising a higher salary of €45,000. More money sounds tempting but it will put me in a higher rate of tax, and I could still be unhappy. What is the best move for me to make here?
A As companies struggle to retain talent, counter-offers are increasingly prevalent in the labour market at the moment, according to Barry Whelan, who is the founder and chief executive of Excel Recruitment.
More money to do the same job is enticing, but the statistics suggest that 80pc of people who accept counter-offers leave the business in the subsequent six months, he said.
You are correct in saying that by accepting the counter-offer, you will be subject to a higher rate of tax. From this year on, the income tax standard rate band for single people has increased from €36,800 to €40,000.
If you accept the counter-offer, you will be hit with the higher tax rate on your earnings above €40,000, Mr Whelan said.
The toxic work environment could be enough reason to move to another job
However, this in itself should not be a reason to turn down the counter-offer as ultimately your take-home pay will be higher, and you can boost your earning potential going forward if you have a higher salary, Mr Whelan said.
The toxic work environment, however, could be enough reason to move to another job as it could be affecting your mental health and your ability to do your job.