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 9th October 2019.

A. Son or daughter - €335,000

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 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 - €335,000

·       Relationship: child i.e. Group A. 

·       Gross taxable inheritance per child - €65,000

·       Tax payable at 33% per child - €21,450

·       Overall inheritance tax due - €42,900

This is correct as of November 2021.

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