Home   Gains, gifts and inheritances  

Gift and Inheritance Tax (Capital Acquisitions Tax – CAT)

  1. Overview
  2. What do you pay CAT on?
  3. What do you not pay CAT on?
  4. How do you calculate CAT?
  5. How and when do you pay and file?
  6. What charges are there for late filing?
  7. Adverse possession
  8. Powers of revocation

How do you calculate CAT?

The calculations will be made automatically when you use myAccount or Revenue Online Service (ROS) to submit your tax return.

The amount of CAT you pay on a gift or an inheritance depends on:

  • its value
  • your relationship to the person who gave it to you
  • and
  • whether you have received other gifts or inheritances within the same group threshold.

You do not have to pay tax on a gift or an inheritance if:

The threshold you use depends on your relationship to the person who gave you the gift or inheritance.

To calculate how much CAT you have to pay, you need to know your correct group threshold and rate of tax. These are determined by the date of the gift or the date of the inheritance. You will also need to know the value of the benefit you received on the valuation date.

You pay tax only on the value of a gift or an inheritance above the tax-free group threshold amount. You may be able to reduce this taxable amount through relevant reliefs, exemptions and credits.

To calculate CAT, you must add to your current benefit any previous gifts or inheritances received under the same group threshold since 5 December 1991.

  • Example

    In 2020, Anne received an inheritance of €30,000 from her grandmother. As this was less than the Group B threshold of €32,500 there was no CAT liability in respect of this benefit.

    In 2022, she received a gift of €40,000 from her aunt. As both benefits fall within the group B threshold aggregation rules apply. As the total of €70,000 exceeds the group B threshold, the excess is taxable.

Gift splitting

If a gift is passed on to someone in a different group within three years of when it was received it is called gift splitting. Gift splitting affects the threshold used.

  • Example

    In January 2022, a father gives €250,000 to his son. In October 2022, the son gives his daughter a house valued at €250,000.

    For tax purposes, the daughter has taken the gift from her grandfather, not from her father. The Group B threshold applies to her gift, not Group A.

CAT paid by the disponer

The disponer may pay the tax due on your gift or inheritance. In this case, your gift or inheritance amount increases by the amount of tax the disponer paid.

  • Example

    Eric receives a gift of €100,000 and John, the disponer, pays the tax. This is considered a further benefit. The final tax due will include the tax payable on the gift of €100,000.

    If Eric has used up his entire available threshold, the tax on €100,000 at 33% is €33,000. Eric is now considered to have taken a gift of €133,000. The tax is recalculated on €133,000, giving a final amount of tax due of €43,890, which John pays.

Next: How and when do you pay and file?

Published: 01 March 2024 Print this page

Back to homepage Back to top