Inheritance Tax

The current rate of Capital Acquisition Tax ("CAT"), also known as Inheritance Tax or Gift Tax, is 33% on all gifts or inheritances which exceed your tax-free threshold.

Some inheritances or gifts are tax-free; where there are 3 different thresholds depending on the relationship between the recipient and the disponer (the person making the gift or bequeathing the inheritance).

Budget 2025 increased the CAT threshold rates, as of 2nd October 2024, as follows:

Group A: Tax-free threshold of €335,000 which applies where the beneficiary is a:

• Child (including an adopted child, and stepchild) of the disponer or the disponers civil partner

• A foster child of the disponer in certain circumstances

• Minor child (under 18 years of age) of a deceased child of the disponer or the disponers civil partner

• Parent where they take an absolute inheritance following the child’s death in certain circumstances

• Niece or nephew where Favourite Nephew or Niece Relief applies

Group B:  Tax-free threshold of €32,500 which applies where the beneficiary is a:

• Parent where threshold A does not apply

• Brother or sister

• Nephew or niece

• Lineal ancestor or lineal descendant of the disponer, such as a grandparent or grandchild

Group C:  In all other cases, the tax-free threshold is €16,250.

The previous CAT thresholds, which applied since 9 October 2019, were:

• Group A €335,000

• Group B €32,500

• Group C €16,250

Capital Acquisition Tax is payable in the following situations:

• Where the disponer is Irish resident, any worldwide assets gifted or inherited.

• Where the beneficiary is Irish resident, any worldwide assets gifted or inherited.

• Where neither the disponer nor the beneficiary is resident, Irish situate assets only.

You do not pay Capital Acquisitions Tax ("CAT") on a gift or an inheritance if either:

• It is given to you by your spouse or civil partner

  or

• The total is below the relevant group threshold amount (when its value is added to previous gifts and inheritances in the same group)

You do not pay CAT on a gift with a value of €3,000 or less from any one person in any one calendar year.

Some gifts and inheritances get tax relief, which reduces the amount of Capital Acquisitions Tax ("CAT") you have to pay.

For example, there are tax reliefs if a gift or inheritance is:

• From your foster parent

• From an aunt or uncle whose business you worked in

• From a relative of your deceased spouse or civil partner

• A business or agricultural property

Our solicitors assist in identifying any opportunities to avail of such reliefs and exemptions and provide expert advice in regard to drafting a will in a tax efficient manner.