Capital Acquisitions Tax
Capital acquisitions tax (CAT) is a tax on gifts and inheritances. It is paid primarily by the person who receives the gift or inheritance (the beneficiary) and the relationship between that beneficiary and the person who provided the gift or inheritance (the disponer) determines the maximum tax-free threshold the beneficiary can avail of.
There are three Group Thresholds which set out the amount below which no tax is payable. These Group Thresholds change from year to year. The Group Thresholds for 2007 to 2010 are set out in the table below.
| Group | Relationship to Disponer |
2007 | 2008 | 2009 | 2009 | 2010 |
| Prior to 8 April 2009 | On or after 8 April 2009 | |||||
| A | Child/Step child/ Foster Child/ Minor Child of a Deceased child/parent* |
€496,824 | €521,208 | €542544 | €434000 | €414,799 |
| B | Parent*/Brother/ sister/grandchild/ niece/nephew |
€49,682 | €52,120 | €54,254 | €43,400 | €41,481 |
| C | Any relationship other than that set out in Groups A & B |
€24,841 | €26,060 | €27,127 | €21,700 | €20,740 |
All gifts and inheritances taken by a beneficiary on or after 5 December 1991 coming within the same Group Threshold are aggregated to determine the amount of tax payable on the current gift or inheritance.
The current rate of CAT is 25% for gifts and inheritances taken on or after 8 April 2009. For gifts and inheritances taken between 20 November 2008 and 7 April 2009, the applicable rate is 22%. For gifts and inheritances taken before 20 November 2008, the applicable rate is 20%.
CAT must be paid within 4 months of the valuation date i.e. the date of the gift or the date of the Grant of Probate.
Various exemptions from CAT have been provided for. For example, the first €3,000 taken as a gift by a beneficiary from a disponer in any one year is exempt from tax as are gifts and inheritances taken by one spouse from the other. There are also a number of reliefs available such as agricultural relief, business property relief and dwelling house relief.
For further information please contact a member of our Property & Private Client Department.
*Where a parent inherits an absolute interest on the death of a child, they fall within Group A. Where the parent receives a gift from a child or where they inherit a limited interest, they fall within Group B.