What are the thresholds and CAT tax rate?

Inheritances can be received free from Capital Acquisitions Tax (CAT) up to a certain amount. The tax-free amount varies depending on your relationship to the person giving the inheritance (Group Threshold). There are three different groups. Each group has a threshold that applies to the total inheritance you’ve received since 5th December 1991, in that group.

At present, the current rate of Capital Acquisition Tax is 33%*.

Capital Acquisitions Tax thresholds after 12th October 2016.

A. Son or daughter - €310,000

B. A parent**, brother, sister, niece, nephew or grandchild of the person giving the gift - €32,500

C. All other relationships, other than those mentioned in A or B - €16,250

*CAT only applies to the amount of the inheritance which exceeds the gift in the relevant group threshold.

CAT is charged at 33% on inheritances made on or after 5th December 2012.

**In certain circumstances, a parent taking an inheritance from a child can qualify for Group A threshold.

Example of how Inheritance Tax works

Net/Taxable Value of Inheritance: €800,000

2 Beneficiaries: Son and Daughter.

Breakdown of inheritance due.

  • Son or Daughter
  • Gross inheritance to each beneficiary - €400,000
  • Less tax-free amount threshold - €310,000
  • Relationship: child i.e. Group A. 
  • Gross taxable inheritance per child - €90,000
  • Tax payable at 33% per child - €29,700
  • Overall inheritance tax due - €59,400

This is correct as of September 2018.

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