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
Description | Amount |
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.