Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances. You can get a certain amount of gifts and inheritances without
paying CAT.

The amount of gifts and inheritances you can get without paying CAT depends on your relationship to the person you get them from. Relationships are grouped into three categories with different tax-free limits. Each limit applies to the total of all the gifts and inheritances you get from people in that category. CAT applies to all property in Ireland. It also applies if the property is not in Ireland but the person giving or receiving it is resident or ordinarily resident in Ireland for tax purposes. The current rate of CAT is 33%. The tax rate only applies to amounts over the group threshold.

Are there exemptions?

There are tax reliefs and exemptions for some types of gift or inheritance. For example, if you get a gift or inheritance from your spouse or civil partner, it is exempt from CAT. There is also an exemption for gifts of up €3,000 a year that you get from the same person.  If you get a gift or inheritance of a house that has been your main residence, it may be exempt from tax if you do not own or have an interest in any other house. There are conditions on how long you must be resident in the house before and after receiving the benefit.

What are the Tax-free limits?

You do not have to pay CAT if the amount you get is below a certain limit. The tax-free amount, or threshold, depends on your relationship to the person who gives you the gift or
inheritance.

There are three different groups of relationship. The groups are called A, B and C. The limit for each group is for the total amount you got in that category since December 5th 1991. The attached table outlines the thresholds which apply since October 2,
2024:

What happens if I get a gift from the parent of my deceased spouse?

If you get a gift or inheritance from a relation of your deceased spouse or civil partner, you will be assessed with the same group as your spouse or civil partner would have been if they got the benefit from their relation. For example, if you get a benefit from the father of your spouse or civil partner, the group threshold would be Group C. But if you get a benefit from the father of your spouse or civil partner and your spouse or civil partner is deceased, then the group threshold that applies to you would be the same as for a child who gets a benefit from a parent, Group A.

What is favourite nephew or niece relief?

If you are the nephew or niece of the person who gives you a gift or inheritance, the Group A tax-free threshold may apply if you have worked in their business for the previous five years. To qualify, you must have worked in the business for more than 24 hours per week or 15 hours per week if the only others who worked there were the giver and their spouse or civil partner. The relief applies only to assets used in the business. The Group B threshold applies to non-business assets.

How is the valuation worked out?

The value of a gift or inheritance for CAT is its market value on the valuation date. If you have paid costs, liabilities or expenses to get a gift or inheritance, these may be deducted to give the taxable value.

In the case of a gift, the valuation date is usually the date of the gift. In the case of an inheritance, the valuation date is the earliest of the dates when the inheritance can be set aside for or given to you, is actually set aside for you, or is transferred or paid over
to you.

The valuation date is the date of death if someone gave you a gift in anticipation of their death; the giver reserved the right to take back the gift but has not done so; or the property passes by survivorship.

This means that you had a right to the property because of the death of another person who had an interest in it. For example, if you are joint tenants and you inherit the property when the co-owner dies.

The value of your gift or inheritance is the best price you would get for it on the open market on the valuation date.

The taxable value is the market value minus allowable deductions.