Revenue clearance for executors

Executors can be held personally liable for tax charges that surface after the estate has been distributed, where the executor failed to take reasonable steps to confirm the tax position before distributing. Revenue clearance is how an executor demonstrates they took those reasonable steps. The request costs nothing, takes 4 to 8 weeks, and removes almost all of the executor's personal exposure.

What Revenue clearance actually is

Revenue clearance is not a formal concept in the CAT Consolidation Act 2003. It is a practical administrative step: the executor writes to Revenue, typically to the CAT Unit in Dublin, confirming the SA2 has been filed and all beneficiary IT38s have been filed, and requests a Letter of No Audit.

The Letter of No Audit confirms that Revenue, having reviewed the case, does not intend to raise any further assessment. It does not guarantee no future audit, but in practice an executor who has distributed the estate after receiving one is protected from personal liability except in cases of fraud or gross negligence.

When to request clearance

Three practical milestones should be complete before requesting clearance:

1. The SA2 has been filed and the Revenue Notice of Acknowledgement received
2. Every beneficiary's IT38 return has been filed (or an explicit confirmation that no return is required)
3. Any CAT due from beneficiaries has been paid or an instalment arrangement agreed with Revenue

Most executors request clearance once all IT38 filings are done and tax paid, which in a standard estate is typically 6 to 12 months after the Grant of Probate issues.

How to request it

There is no single official form. The standard approach:

1. Write to the CAT Unit of Revenue in Dublin, naming the deceased (full name, date of death, PPS number) and quoting the SA2 reference number from the Notice of Acknowledgement.
2. Confirm the date of the Grant of Probate and enclose a copy of the Grant.
3. List every beneficiary, their relationship to the deceased, the value of their benefit, and the status of their IT38 return (filed and paid, filed and reduced to nil by reliefs, or below the 80% filing threshold).
4. State that the executor proposes to distribute the remaining estate and requests confirmation that Revenue has no further queries.
5. Include a covering email address or postal address for Revenue's reply.

Revenue typically responds within 4 to 8 weeks. Responses come in three forms:

• Letter of No Audit: no further tax issues; the executor may proceed to distribute.
• Letter with queries: Revenue wants specific items clarified (missing IT38, valuation queried, aggregation discrepancy). Respond, wait, re-request.
• Notice of audit: a full audit is being opened. Distribution should be paused until the audit concludes.

The majority of standard estates receive a Letter of No Audit without queries.

What clearance protects you from

The main risk an executor faces is personal liability for a CAT charge that emerges after the estate has been distributed. The classic scenario:

An executor distributes €250,000 to each of four adult children on the basis that each inheritance is well within the Group A threshold. Two years later, Revenue notices an under-declared 2018 gift from the deceased to the eldest child. Revenue assesses additional CAT of €20,000 on that child. The child has spent the €250,000 and cannot or will not pay. Revenue pursues the executor personally for the €20,000 plus interest.

Revenue's formal position: the executor has a duty to take reasonable care before distributing. Distributing without requesting clearance, where professional advice or basic prudence would suggest clearance, exposes the executor. Distributing after receiving a Letter of No Audit is treated as reasonable care in almost all cases.

What clearance does not protect you from

Revenue clearance is not a shield against:

• Later-discovered assets that should have been on the SA2 (for example, a foreign bank account the executor did not know about)
• Fraudulent under-declaration by the executor
• Beneficiaries failing to file their own IT38s (the beneficiary is liable for their own tax; the executor's duty is to pass accurate information to them)

For any of these, the executor's position rests on having acted reasonably based on available information at the time. Records matter: keep written copies of every request for information, every confirmation received, every valuation letter.

Partial distribution before clearance

An executor does not have to wait for clearance before making any distribution. Standard practice on a multi-beneficiary estate:

1. Once the Grant issues and assets are collected, pay specific legacies (named amounts or named items) in full.
2. Distribute a substantial portion of the residue (typically 80% to 90%) to the residuary beneficiaries, retaining a reserve of 10% to 20% to cover any tax contingency.
3. Once the Letter of No Audit arrives, distribute the remaining reserve to the residuary beneficiaries.
4. Close the estate accounts.

This staged approach meets the needs of beneficiaries who want their inheritance as early as possible while preserving the executor's reserve against tax contingencies.

Timing relative to the Executor's Year

The Executor's Year expires 12 months after the date of death. Revenue clearance for many estates arrives 10 to 14 months after death, roughly aligned with the Executor's Year. Beneficiaries pressing for full distribution before the Executor's Year has expired should be told, in writing, that distribution will follow Revenue clearance. This framing is defensible as ordinary executor prudence.

When professional advice is essential

The Revenue clearance process is straightforward enough that most executors handle it without professional help. Retain a tax adviser or solicitor where:

• The estate includes reliefs claimed on multiple IT38s (Agricultural Relief, Business Relief, Section 72)
• Any beneficiary's IT38 has been queried by Revenue
• The estate includes foreign assets with Double Taxation implications
• The estate is above €1 million in gross value
• The executor is themselves also a beneficiary and wants an independent check before signing off

On a standard estate (a house, bank accounts, a pension, a will, family beneficiaries, all in Ireland), the clearance process is a single letter, a 4-to-8 week wait, and a Letter of No Audit that closes out the administration.