Capital Acquisitions Tax is payable on gifts and inheritances above certain thresholds in Ireland. The amount you pay — or whether you pay at all — depends on your relationship to the person who left you the inheritance. Understanding your position before the estate is distributed saves surprises.
Capital Acquisitions Tax (CAT) is charged at 33% on the value of an inheritance above the relevant threshold. The threshold depends on the relationship between the beneficiary and the deceased:
Group A — €335,000: Children (including stepchildren and adopted children), and parents inheriting from a child.
Group B — €32,500: Siblings, nieces, nephews, grandchildren, and lineal ancestors or descendants other than those in Group A.
Group C — €16,250: All other relationships including unmarried partners.
These thresholds are lifetime cumulative — all gifts and inheritances from persons in the same group are aggregated across your lifetime. Prior gifts received can reduce the threshold available for a later inheritance.
Several exemptions apply, including the dwelling house exemption, agricultural relief, and business relief — which can significantly reduce or eliminate CAT liability in the right circumstances.
A CAT return must be filed and any tax paid within 4 months of the valuation date — which is generally the date of death for inheritances. Failure to file and pay on time results in interest and penalties. Revenue has a statutory right to review CAT returns for up to 4 years from the filing date.
Siobhan was left her aunt's house in Cork — a property worth €280,000. She had been close to her aunt all her life and had assumed the inheritance was straightforward.
Her solicitor explained that as a niece, Siobhan fell into Group B — with a lifetime threshold of €32,500. She had previously received a gift of €15,000 from the same aunt five years earlier, which had already used up €15,000 of her threshold. Her remaining threshold was €17,500.
The taxable amount was therefore €280,000 minus €17,500 — €262,500 — taxed at 33%, producing a CAT liability of approximately €86,600.
Siobhan had not expected this and did not have the funds to pay it. Her solicitor advised that she had the option to sell the property and pay the tax from proceeds, or to obtain a bridging loan. She also explored whether the dwelling house exemption might apply — it did not, as she had her own home.
The solicitor also checked whether any agricultural or business relief was available. The property was a residential house with no qualifying land. Siobhan sold the property and paid the tax from proceeds.
Free assessment. No obligation. Probate and tax solicitors across all 26 counties.
Tell Us What Happened