Capital Acquisitions Tax (CAT) is the tax charged on gifts and inheritances in Ireland. At 33%, it can amount to a significant sum. Understanding the thresholds, exemptions, and reliefs can help you plan effectively.
The amount you can receive tax-free depends on your relationship to the person giving the gift or inheritance:
| Group | Relationship | Threshold |
|---|---|---|
| Group A | Child from parent (including adopted child, stepchild in certain cases) | EUR 400,000 |
| Group B | Sibling, niece, nephew, grandchild, lineal ancestor | EUR 40,000 |
| Group C | All others (friend, cousin, in-law) | EUR 20,000 |
These thresholds are cumulative over your lifetime. Every gift or inheritance you receive from donors in the same group is added together. Once the total exceeds the threshold, you pay 33% on the excess.
Transfers between spouses or civil partners are fully exempt from CAT. There is no limit.
The first EUR 3,000 received from any one person in any calendar year is exempt from CAT. This is per donor, per year, and does not count against your lifetime threshold. A parent can give EUR 3,000 to each child every year without any CAT implications.
Under Section 86 CATCA 2003, a dwelling house may be inherited free of CAT if the beneficiary has lived in the property as their only or main residence for 3 years before the inheritance and does not own any other residential property. The beneficiary must continue to live in the property for 6 years after inheriting. Conditions are strict and carefully checked by Revenue.
Agricultural relief reduces the taxable value of agricultural property by 90%. The beneficiary must be a "farmer" (80% of assets must be agricultural after the benefit). Business relief also reduces the taxable value of qualifying business assets by 90%. Both reliefs can make a large inheritance manageable, but the conditions are specific.
The value of the inheritance is determined on the "valuation date", which is generally the date of death (for inheritances) or the date the gift becomes effective (for gifts). Property is valued at market value on that date.
CAT returns are due by 31 October of the year following the year in which the valuation date falls (or mid-November for ROS filers). Use Form IT38 (or IT38S for simpler cases). Payment is due on the same date.
Threshold calculation with prior benefits, all reliefs checked, valuation guidance, and IT38 form completion. EUR 79, delivered by email.
Get Your Report - EUR 79Making use of the EUR 3,000 annual small gift exemption over many years can significantly reduce the eventual CAT bill. Parents giving EUR 3,000 to a child each year for 20 years transfer EUR 60,000 outside the CAT net entirely, without touching the EUR 400,000 Group A threshold.
The most common misunderstanding about CAT is that each gift or inheritance is assessed independently. In fact, Revenue aggregates every benefit you receive from donors in the same group over your entire lifetime. If you received EUR 50,000 from your mother in 2015 and inherit EUR 380,000 from your father in 2026, both are Group A. Your aggregate is EUR 430,000, which exceeds the EUR 400,000 threshold by EUR 30,000. You owe 33% on that EUR 30,000 excess.
This is why the small gift exemption (EUR 3,000 per donor per year) is so valuable for planning. These gifts do not count towards the lifetime aggregate at all.
The value of an inheritance is determined on the "valuation date", which is generally the date the executor or administrator becomes entitled to transfer the asset (often the date probate is granted). For gifts, the valuation date is the date the gift becomes unconditional. Property is valued at open market value on that date, which may require a professional valuation.
The CAT return (Form IT38 or IT38S) is due by 31 October of the year following the year in which the valuation date falls, with an extension to mid-November for ROS filers. Payment is due on the same date.
Start early. A parent giving EUR 3,000 per year to each child for 20 years transfers EUR 60,000 completely outside the CAT net. If both parents give to two children, that is EUR 240,000 over 20 years. Combined with the EUR 400,000 Group A threshold per parent, a family can transfer very substantial wealth tax-free with proper planning and time.
Disclaimer: This information reflects the 2026 tax year. Tax rules change annually following the Budget. Check Revenue.ie for the latest rates and thresholds. This guide is for informational purposes only and does not constitute tax advice.