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Credits you can claim against Capital Acquisitions Tax (CAT)

  1. Overview
  2. Credit for Capital Gains Tax (CGT)
  3. Credit for double taxation
  4. Double Taxation Relief (UK)
  5. Double Taxation Relief (USA)
  6. Unilateral relief
  7. Prior tax on the same event

Unilateral relief

Unilateral relief is relief from double taxation for property in states other than the UK and the USA. It can only apply where there is no Double Taxation Treaty in place between countries. Revenue may allow a credit against CAT payable in Ireland where tax was already paid in another country on that same property.

The country which charges tax on the foreign property will grant the credit. The credit granted is the lesser of:

  • the CAT payable on the property situated abroad
  • the foreign tax on the foreign property.

The credit given cannot be greater than the amount of Irish tax paid on the property.

  • Example 1

    Mary who was domiciled in Ireland dies in 2014 leaving all of her property to her granddaughter, Gráinne. Mary’s estate consists of Irish property valued at €250,000 and property in Country A valued at €190,000. Country A does not have a Double Taxation Treaty in place with Ireland. Gráinne has no Group B tax-free threshold available to her. Country A charges tax at a rate of 30%.

    Calculation of Irish CAT due on foreign property
    DescriptionAmount
    Country A tax paid @30% €57,000
    Irish CAT @33%  €62,700
    Less unilateral relief for Country A tax paid (€57,000)
    Less available Group B tax-free threshold (0)
    Net Irish CAT due on foreign property €5,700

    In this case, full credit is available on the foreign property. This is because the amount of tax paid in Country A is less than that in Ireland.

  • Example 2

    Declan who was domiciled in Ireland dies in 2012 leaving his entire estate to his nephew, Thomas. Declan’s estate contains Irish property valued at €425,000 and property in Country B valued at €200,000. Country B does not have a Double Taxation Treaty in place with Ireland. Thomas has no Group B tax-free threshold available to him. Country B charges tax at a rate of 40%.

    Calculation of Irish CAT due on foreign property
    DescriptionAmount
    Country B tax paid @40% €80,000
    Irish CAT @33% €66,000
    Less unilateral relief for Country B tax paid (€66,000)
    Less available Group B tax-free threshold (0)
    Net Irish CAT due on foreign property €0

In this case, no credit is available on the foreign property. This is because the amount of tax paid in Country B is greater than that in Ireland. 

Next: Prior tax on the same event

Published: 07 May 2019 Print this page

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