Inheritance & Gift Tax

Capital Acquisitions Tax (CAT) at 33% applies to inheritances and gifts.

However, the current lifetime tax free thresholds are:

Group A (Parents) €335,000

Group B (Relatives) € 32,500

Group C (Other) € 16,250

There are various tax reliefs available to reduce a CAT liability as follows:

(1) Dwelling House Exemption

Inheritances and certain gifts of a dwelling house may be exempt from CAT where certain conditions are satisfied.

(2) Agricultural Relief

This reduces the taxable value of a gift/inheritance of agricultural property by 90% relief. A number of conditions must be satisfied to qualify for the relief.

(3) Business Relief

This also reduces the taxable value of business property by 90% where conditions are satisfied. Farm businesses may qualify for Business Relief even if Agricultural Relief does not apply.

Our Advice

- Making a Will is important

- Potential tax liabilities can be substantial, so tax advice is necessary prior to finalising a Will

- Certain assets transfers could be liable to both Capital Gains Tax (CGT) as well as CAT

- Business Relief may apply where Agricultural Relief does not.

- An individual can receive a tax free gift of €3,000 per annum

- Be careful! – A claw back of reliefs can occur where conditions are not satisfied.