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Filing obligations for certain family loans

When is a family loan reportable?

If you receive a gift in respect of a specified loan, you may have to file a Capital Acquisitions Tax (CAT) return.

A specified loan is any loan, advance or any form of credit that is:

  • received by you from a close relative
  • received by you from a company of which a close relative is a beneficial owner
  • made by a close relative to a company of which you are a beneficial owner
  • or
  • made between two companies where:
    • you are a beneficial owner of the borrowing company
    • and
    • a close relative is a beneficial owner of the lending company.

Note

A close relative is someone related to you for the purposes of either the Group A or Group B thresholds.

For the year 2025 and onwards, you will have to file a CAT return where:

For the year 2024, you will have to file a CAT return where:

  • you are deemed to have taken a gift for CAT purposes in respect of a specified loan in the year
  • no interest was paid on the loan within 6 months of the end of the year of that gift
  • and
  • the combined balance on the loan and any other specified loan exceeds €335,000 in the year.

What information will you need to provide?

If you have to file a CAT return on receipt of a gift in respect of a specified loan, you include:

  • the name, address and tax reference number of the person you received the loan from
  • the market value of the free use of the loan
  • and
  • the balance outstanding on the loan.
  • Example

    James receives an interest free loan of €500,000 from his father on 1 January 2025. The highest rate of return he could receive from an investment on deposit on this amount is 1.5%. The loan is still outstanding on 31 December 2025.

    Calculate taxable value
    DescriptionValues
    Loan value €500,000
    Multiply by highest rate of return 1.5%
    Taxable value €7,500

    For CAT purposes, James is deemed to take a gift of €7,500 from his father on 31 December 2025. After allowing for the small gifts exemption, the taxable value of the gift is €4,500. This will count towards James' Group A threshold.

    Assuming James has not used any of his Group A threshold, no tax liability arises in relation to the gift. The taxable value of the gift does not exceed 80% of his Group A threshold and ordinarily he would not be required to file a CAT return.

    However, from 1 January 2025 he will be required to file a CAT return for each year the loan is outstanding.

Published: 01 January 2025 Print this page

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