Inheritance Tax Planning

Capital Acquisitions Tax (CAT) is also known as Inheritance Tax or Gift Tax and is a tax charged on money or property that is gifted to or inherited by someone.

There are 3 different threshold levels (groups) depending on the relationship between the recipient and the donor (disponer) of the gift or inheritance. Amounts under each threshold below are tax free as per current tax legislation.

Group A: €335,000 Tax Free Threshold

This applies where the beneficiary is a

  • child (including adopted child, stepchild and certain foster children) or
  • minor child of a deceased child of the disponer.
  • Parents also fall within this threshold where they take an absolute inheritance from a child (not a gift)

Group B: €32,500 Tax Free Threshold. 

This applies where the beneficiary is a

  • brother, sister,
  • nephew, a niece or
  • lineal ancestor or lineal descendant of the disponer (e.g. grandchild).

Group C:  €16,250 Tax Free Thresholdand it applies in all other cases.

The current rate (2020) of CAT is 33% and is charged on the value of the gift or inheritance received above your tax-free group threshold. If it is anticipated that that you will receive a gift or inheritance which exceeds the value of your tax-free threshold, we can guide you as to the benefits of the various Revenue approved insurance policies designed to pay these taxes on your behalf.

For more information call us