Capital Acquisition Tax (CAT)
What is Capital Acquisitions Tax (CAT)?
CAT is tax you pay when you receive a gift or an inheritance. CAT comprises two separate taxes - a Gift Tax, payable on lifetime gifts and an Inheritance Tax payable on inheritances received on death. It is the person receiving the gift or inheritance who is liable to CAT and not the person or estate providing the benefit.
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How is it charged?
With effect from 1st December 1999, a charge to CAT will arise where either the disponer (The person giving the asset) or the beneficiary (the person receiving the asset) is resident or ordinarily resident in the State at the Date of the Gift or Inheritance
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Where both the disponer and the beneficiary are not resident or ordinarily resident in Ireland, a charge to tax would only arise in relation to Irish Property
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What is the tax rate?
33% is the current rate of tax on gifts or inheritances received by the beneficiary.
Source CAT consolidation Act 2003 (as updated by subsequent Finance Acts)
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Can you get any amount tax free?
The amount a beneficiary can receive tax free depends on their relationship to the disponer.
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Group Thresholds
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Group A €400,000
The Group A threshold applies where you, the beneficiary, on the date of the gift or inheritance are:
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a child of:
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the disponer
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or
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the disponer’s civil partner
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a minor child, under 18 years of age, of a deceased child of:
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the disponer
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or
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the disponer’s civil partner
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a minor child of the civil partner of a deceased child of:
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the disponer
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or
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the civil partner
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a foster child of the disponer, in certain circumstances
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or
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a parent of the disponer and you inherit an absolute interest of an inheritance on the death of your child. An inheritance of a limited interest does not qualify for the Group A threshold.
An Estate may consist of several different properties. It is not necessary for a parent to inherit the whole of an Estate in order to take an absolute interest. A person inherits an absolute interest in a property if the deceased has not attached any conditions or restrictions in relation to that property.
Group B €40,000
The Group B threshold applies where you, the beneficiary, on the date of the gift or inheritance are:
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a parent of the disponer, where you take a gift or a limited interest
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a brother or sister of the disponer
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a child of a brother or sister of the disponer (Favourite Nephew or Niece Relief may apply)
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a child of the civil partner of a brother or sister of the disponer
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a lineal ancestor of the disponer, such as a grandparent
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or
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a lineal descendant of the disponer such as a grandchild (other than a lineal descendant referred to in group A).
If you, the beneficiary, were fostered, the Group B threshold may be available if the gift or inheritance is received from:
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a relative of your foster parent
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or
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a person who was also fostered by your foster parent.
For further information, please see Foster Child Relief.
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Group C €20,000
The Group C threshold applies where you, the beneficiary, on the date of the gift or inheritance, do not have a relationship with:
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the disponer covered in Group A
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or
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the disponer covered in Group B.
Group C includes benefits taken by uncles, aunts, grandnephews, grandnieces, cousins, in-laws and friends. A benefit received by a nephew or niece, from an uncle or aunt, is Group B. However, a benefit received by an uncle or aunt, from a nephew or niece, is Group C.
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