capital acquisitions tax

New: See here Plain Language Introduction to Capital Acquisition Tax in Ireland

Capital Acquisitions Tax (CAT) is a tax payable by a person who benefits from a will or a gift.

The tax is calculated by reference to:
(a) the value of the gift,
(b) the relationship in law between the donor and the donee,
(c) the thresholds applicable at the date of the gift and
(d) whether the donee has received prior gifts from any donor.

Pre Finance Act 2000:
Prior to the Finance Act 2000, Irish CAT was payable on property situated in Ireland but the charge to Irish CAT extended to include property situate abroad if a deceased died domiciled in Ireland.

Post Finance Act 2000:
From 1 December 1999 gifts or inheritances of Irish property are liable to tax whether or not the disponer is resident or domiciled in Ireland.

And from 1 December 1999 foreign property is liable to Irish Capital Acquisitions Tax where either the disponer or the beneficiary is resident or ordinarily resident in Ireland at the relevant date i.e. the date of the gift or (in the case of a death) the date of the death.

(as a transitional measure a foreign domiciled person was not to be regarded as resident or ordinarily resident in Ireland for CAT purposes before 1 December 2004).

The following scale sets out the (reduced) main tax free thresholds for gifts or inheritances arising after 7th December 2011.

Once the tax free threshold for a particular beneficiary has been exceeded, tax is payable on the remainder of the benefit at the current rate of 30% (previously 20% then 22% then 25%)

Gift	Threshold for Capital Acquisitions Tax
Gifts between spouses	no limit
Gifts from parent to child, to a foster child, or to a minor child of a deceased child	down to euro €250,000
Gifts between siblings	down to euro €33,208
Gifts to nephews & nieces or to grandchildren	down to euro €33,208
Gifts to others	down to euro €16,604

The above list is not exhaustive. In some situations there are other factors, relevant dates and sources of prior gifts, residence factors, and other situations and exceptions all to be taken into account in determining the applicable allowances and the particular tax liability

The thresholds applicable to gifts and inheritances up to 2011 can be found at THIS section of the Irish Revenue website

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