Death and Taxes: Capital Acquisitions Tax (CAT) in Ireland
You may be in the fortunate position of receiving a generous gift from a family member this year. Or perhaps you have lost a loved one and inherited some assets from them.
Whether it’s a gift or an inheritance, you need to be aware of Capital Acquisitions Tax (CAT) and the rules surrounding it.
What Is Capital Acquisitions Tax?
CAT is commonly referred to as Gift Tax or Inheritance Tax. A gift is a benefit received from someone who is alive, whereas an inheritance is a benefit taken from someone who has passed away.
Examples of Gifts or Inheritances:
- Cash
- Jewellery or a car
- House or land
- Stocks and shares
- The free use of a house for life
- An interest-free loan
How Is CAT Applied?
The benefit (gift or inheritance) is taxed if its value exceeds a certain threshold. Different tax-free thresholds apply depending on the relationship between the disponer (the person giving the benefit) and the beneficiary (the person receiving the benefit). There are also exemptions and reliefs depending on the type of gift or inheritance.
For example:
- If you receive a gift or inheritance from your spouse or civil partner, you are exempt from CAT.
- You do not pay CAT on a gift valued at €3,000 or less from any one person in any one year. This exemption does not apply to inheritances.
CAT applies to all property located in Ireland. It also applies to property outside Ireland if either the disponer or beneficiary is tax resident in Ireland.
Updated CAT Thresholds for 2025
|
Group |
Relationship |
2025 Threshold |
|
Group A |
Child (including stepchild, adopted child, and certain foster children) |
€400,000 |
|
Group B |
Parent, grandparent, grandchild, great-grandchild, brother, sister, nephew, niece | €400,000 |
|
Group C |
Any relationship not included in Group A or B | €20,000 |
Exceptions
If a grandchild is under 18 and receives a gift or inheritance from a grandparent, Group A may apply if the grandchild’s parent is deceased.
How Is CAT Calculated?
CAT is charged at 33% on gifts or inheritances above the threshold.
For example, if you receive gifts from your parents worth €750,000, you only pay tax on the amount above the Group A threshold (€400,000).
So, €350,000 is taxed at 33%.
CAT Filing Requirements
You must make a tax return if the total value of gifts and inheritances you have received in one of the groups (A, B, or C) since 5 December 1991 exceeds 80% of the tax-free threshold for that group.
For example:
- If you receive a €15,000 gift from a sister and a €12,000 inheritance from a grandparent, both fall under Group B.
- The total amount received is €27,000, and the Group B threshold is €40,000.
- Since 80% of the threshold is €32,000, you do not owe tax but must file a tax return.
CAT Payment Deadlines
All gifts and inheritances with a valuation date in the 12-month period ending on 31 August must be paid and filed by 31 October.
For example:
- If the valuation date is between 1 January and 31 August 2025, you must file and pay by 31 October 2025.
- If the valuation date is between 1 September and 31 December 2025, you must file and pay by 31 October 2026.
How to File a CAT Return
CAT returns must be filed electronically using Revenue’s Online Service (ROS). In limited circumstances, a paper return can be submitted.
We Can Help
Filing a CAT return can be a complex and time-consuming process, especially when you're navigating exemptions, thresholds, and deadlines. Fortunately, you don't have to manage it alone. A qualified accountant can handle the return on your behalf, ensuring everything is filed accurately and on time. At TaxAssist Accountants, we offer expert support to guide you through every step of your CAT obligations, making the process as smooth and stress-free as possible. Contact us today.
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Last updated: 16th July 2025