Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances (benefits) received by individuals (beneficiaries) from other individuals (donors).
The gift or inheritance is taxed if its value is over a certain limit or 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) The current CAT thresholds (from the 9th October 2019) are set out below:
|Group A: €335,000||Applies where the beneficiary is a child (including adopted child, step-child and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.|
|Applies where the beneficiary is a brother, sister, niece, nephew or lineal ancestor or lineal descendant of the disponer.|
|Applies in all other cases.|
The following are exemptions from CAT:
Business Relief: Gifts or inheritance of relevant business property qualify for relief (subject to conditions) that reduces the taxable value of the property by 90% for the purposes of CAT.
Agricultural Relief: Gifts and inheritances of agricultural property qualify for relief (subject to conditions) that reduces the taxable value of the property by 90% for the purposes of CAT.
Favourite Nephew / Niece Relief: When certain conditions are met the nephew or niece of a disponer can be treated as the child of the disponer for the purposes of CAT Relief. What this means is that the nephew/niece is moved from the Group B to Group A Threshold. To qualify, the following conditions must be met.