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 group thresholds.

A ‘child’ includes an adopted child and a stepchild.

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
  • or
  • the disponer’s civil partner
• a minor child, under 18 years of age, of a deceased child of:
  • the disponer
  • or
  • the disponer’s civil partner
• a minor child of the civil partner of a deceased child of:
  • the disponer
  • or
  • the civil partner
• a foster child of the disponer, in certain circumstances
• or
• 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

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 lineal ancestor of the disponer, such as a grandparent
• or
• 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:

• a relative of your foster parent
• or
• a person who was also fostered by your foster parent.

For further information, please see Foster Child Relief.

Group C

The Group C threshold applies where you, the beneficiary, on the date of the gift or inheritance, do not have a relationship with:

• the disponer covered in Group A
• or
• 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.

Group thresholds

Each group has a tax-free threshold amount. 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