What Capital Acquisitions Tax applies to inheritance?

What the Law Says

The Capital Acquisitions Tax Consolidation Act 2003 sets out the rules for taxing inheritances in Ireland. CAT applies to the market value of property acquired on death, after deducting liabilities and allowable expenses.

Capital Acquisitions Tax (CAT) is charged on the total value of gifts and inheritances you receive over your lifetime — but only the amount that exceeds your tax-free group threshold. The threshold depends on your relationship to the person who died: Group A (e.g., child), Group B (e.g., sibling, parent, niece/nephew), or Group C (e.g., unrelated person).

The tax rate is 33% on the taxable amount — that is, the value of the inheritance minus your available threshold and any reliefs. You must file a CAT return and pay the tax within four years of the date of death.

Reliefs may apply — for example, dwelling house relief (if you lived with the deceased for 3 years before death and meet other conditions) or agricultural relief (reducing the taxable value by 90% for qualifying farm assets).

Statutory Text

Capital Acquisitions Tax Consolidation Act 2003 s. 2:

— Capital Acquisitions Tax Consolidation Act 2003, s. 2 — Interpretation

What to Do

Sources