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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 (US)
  6. Unilateral relief
  7. Prior CAT on the same event

Unilateral relief

Unilateral relief is a relief from double taxation in respect of gifts or inheritances of foreign property. It is available only where there is no Double Taxation Treaty in place between Ireland and the other country. Relief is allowable in respect of tax imposed by a foreign country on property situated in that foreign country.

The allowable credit is the lesser of:

  • the amount of CAT payable on the foreign property
  • or
  • the amount of foreign tax payable on the foreign property.

The credit can only be granted where the same event (gift or death) gives rise to tax in both countries.

If a benefit comprises both Irish and foreign property, the credit for foreign tax is allowable against the CAT applicable to the foreign property only.

  • Example 1

    Mary who was resident in Ireland died in 2020 and left all her property to her Irish resident granddaughter, Gráinne. Mary’s estate comprised 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 resident in Ireland, died in 2020 and left his entire estate to his Irish resident nephew, Thomas. Declan’s estate comprised 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, credit is restricted to the amount of Irish CAT paid. The tax paid in Country B is greater than that in Ireland. The credit given cannot be greater than the amount of Irish tax paid on the foreign property.

How do you claim Unilateral Relief?

To claim the relief, a CAT return must be filed online through Revenue Online Service (ROS) or myAccount. Documentation from the foreign tax authorities should also be submitted in support of your claim.

Next: Prior CAT on the same event

Published: 17 May 2024 Print this page

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