Capital Acquisitions Tax (CAT) thresholds, rates and aggregation rules

CAT groups and group thresholds

Note

Gifts and inheritances taken by a Spouse or Civil Partner are exempt from CAT.

If you are a widow, widower or a surviving civil partner, Surviving Spouse or Surviving Civil Partner Relief may apply to you. This relief may affect which threshold applies to you.

You do not pay tax on a gift or inheritance if its taxable value is below a particular threshold. The threshold you use depends on your relationship to the disponer. You must pay tax on any remaining value above that threshold.

There are three groups with different thresholds that apply from 7 December 2011.

Note

A ‘child’ includes a son, daughter, stepchild and certain foster children.

Group A

The Group A threshold applies where you, the beneficiary, on the date of the gift or inheritance are:

• a child of the:
  • disponer
  • disponer’s spouse or civil partner (commonly known as a stepchild)
• a minor child, under 18 years of age, of a deceased child of the:
  • disponer (commonly known as a grandchild)
  • disponer’s spouse or civil partner (commonly known as a step-grandchild)
• a minor child of the spouse or civil partner of a deceased child of the:
  • disponer
  • disponer’s spouse or civil partner
• a parent of the disponer and you take an absolute interest (that is, not a limited interest) of an inheritance on the death of your child.

Note

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

The Group B threshold applies where you, the beneficiary, on the date of the gift or inheritance are:

• a parent of the disponer, where you take a gift or a limited interest
  
• a brother or sister of the disponer
• a child of a brother or sister of the disponer (Favourite Nephew or Niece Relief may apply)
• a child of the civil partner of a brother or sister of the disponer
• a grandparent of the disponer
• a grandchild of the disponer
• a lineal ancestor or a lineal descendant of the disponer.

Group C

The Group C threshold applies where you, the beneficiary, on the date of the gift or inheritance have a relationship to the disponer not already covered in Groups A or B.

Group thresholds

Each group has a tax-free threshold amount that apply from 7 December 2011.

The threshold is cumulative and applies to the total taxable benefits you have received in that group. (You must include the taxable value of any previous gifts and inheritances received since 5 December 1991 in the same group.)

You only pay tax on the value of a gift or inheritance above the tax-free group threshold amount.

Next: CAT rates