Valuation date and the value of benefits

Rights of residence

An exclusive right of residence is regarded as a limited interest for Capital Acquisition Tax (CAT) purposes. For further information on limited interests, please see the page 'Limited interest' in this section.

A right to reside in a property is a right to live in that property only. It does not allow for the exclusive use of the property. A right of residence sometimes includes a right of support and maintenance. Such rights are chargeable to CAT. 

You can file your IT38 return in myAccount or in Revenue Online Service (ROS).

The value of a right of residence is calculated by reference to the 'appropriate part' of the market value of the property. Use the formula (A × B) ÷ C where:

• (A) is the market value of the property
• (B) is the annual value of right of residence
• (C) is the annual letting value of the property.

In practice, Revenue will accept 10% of the market value of the property as the value of a right of residence. A value of 20% is accepted where there is a right of residence, and support and maintenance.

To calculate the taxable value of the right, please use the tables in  Schedule 1, Capital Acquisitions Tax Consolidation Act, 2003. 

The beneficiary of a property charged with a right of residence can claim a deduction in respect of that right.

When the right of residence ceases, the beneficiary of the property will have a further charge to CAT. This charge is based on the market value of the right of residence at the date it ceases. The same method used to calculate the original deduction for the right has to be used to calculate this.

For further guidance, please see  CAT Part 25 - Rights of Residence.

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