Many people plan to leave inheritances to their children, to relatives or to deserving charities after they die. This section details the tax treatment of inheritances in Ireland and suggests ways of minimising the burden of Capital Acquisitions Tax.
Capital Acquisitions Tax (CAT)
CAT is applied both to gifts and to inheritances at the rate of 33% (2015).
A certain amount can be gifted or bequeathed tax free, depending on which ‘group’ the recipient falls into, as follows:
Group A: €280,000 where the recipient is a child of the benefactor (or a minor grandchild of the benefactor if the parent is dead). This threshold may in limited circumstances be applied to a parent, surviving spouse of a deceased child and a niece/nephew if any of these has worked in a family business, substantially on a full-time basis, for a period of 5 years or more.
Group B: €38,150 where the recipient is a brother, sister, niece, nephew, parent or lineal ancestor/descendant of the benefactor.
Group C: €15,075 in all other cases.