If you have received a gift or inheritance, then you are responsible for paying any Capital Acquisitions Tax that is due. If you are not resident in Ireland, you must get an agent who is resident in Ireland, such as a solicitor, to take responsibility for the payment of CAT.
You must make a tax return if the total value of gifts and inheritances you have received in one of the groups, A, B or C, since 5 December 1991 is more than 80% of the tax-free threshold for that group.
For example, if you received a gift of €20,000 from a brother and then an inheritance of €10,000 from a grandparent, both of these benefits would come under Group B and amount to a total of €30,000. The threshold for Group B is currently €32,500 and 80% of this is €26,000. Because the benefits you received exceed 80% of the tax-free threshold for Group B, you are required to make a tax return even though the total amount received is below the threshold.
You must make a tax return if the total value of gifts and inheritances you have received in one of the groups, A, B or C, since 5 December 1991 is more than 80% of the tax-free threshold for that group.
For example, if you received a gift of €20,000 from a brother and then an inheritance of €10,000 from a grandparent, both of these benefits would come under Group B and amount to a total of €30,000. The threshold for Group B is currently €32,500 and 80% of this is €26,000. Because the benefits you received exceed 80% of the tax-free threshold for Group B, you are required to make a tax return even though the total amount received is below the threshold.
Making your return
Gift and inheritance tax returns must be made electronically using Revenue’s Online Service. Revenue provide a guide to filing your gift or inheritance tax return online.
There are some exceptions where a paper gift and inheritance tax return (Form IT38S) is available. It can only be used by you, the taxpayer, if you meet the following criteria:
Taxable gifts or inheritances with a valuation date on or after 14 June 2010 have a fixed CAT pay and file date. All gifts and inheritances with a valuation date in the 12-month period ending on the 31 August must be paid and filed by 31 October.
This means, if the valuation date is between 1 January and 31 August, you must complete the tax return and pay the tax on or before 31 October in that year. If the valuation date is between 1 September and 31 December, you must complete the tax return and pay the tax on or before 31 October in the following year. If you pay and file your tax return online using the Revenue Online Service (ROS), you may be able to file your return slightly later.
For example -
If your inheritance has a valuation date of 21 February 2019, you must complete the tax return and pay the tax on or before 31 October 2019.
If your inheritance has a valuation date of 6 November 2019, you must complete the tax return and pay the tax on or before 31 October 2020. However, if you pay and file online through ROS this deadline is extended to 12 November 2020.
There is a surcharge for late pay and file of CAT. The surcharge is based on a percentage of the total tax payable for the year the return is late and graded according to the length of the delay. However, there is an overall cap on the level of the surcharge which is calculated as follows5% surcharge to a maximum of €12,695, if you complete the tax return and pay the tax within 2 months of the pay and file date.
In certain circumstances, it is possible to pay the tax by instalments over a period not exceeding 60 months. This applies to any property where the beneficiary does not have full and complete ownership.
It also applies if the benefit is full and complete ownership of the following:
Revenue can consider allowing a postponement of tax due if there is hardship involved.
There are some exceptions where a paper gift and inheritance tax return (Form IT38S) is available. It can only be used by you, the taxpayer, if you meet the following criteria:
- You are not claiming any relief, exemption or credit, apart from small gift exemption.
- The benefit taken is an absolute interest without conditions or restrictions.
- The property included in the return was taken from only one disponer and is not part of a larger benefit.
Taxable gifts or inheritances with a valuation date on or after 14 June 2010 have a fixed CAT pay and file date. All gifts and inheritances with a valuation date in the 12-month period ending on the 31 August must be paid and filed by 31 October.
This means, if the valuation date is between 1 January and 31 August, you must complete the tax return and pay the tax on or before 31 October in that year. If the valuation date is between 1 September and 31 December, you must complete the tax return and pay the tax on or before 31 October in the following year. If you pay and file your tax return online using the Revenue Online Service (ROS), you may be able to file your return slightly later.
For example -
If your inheritance has a valuation date of 21 February 2019, you must complete the tax return and pay the tax on or before 31 October 2019.
If your inheritance has a valuation date of 6 November 2019, you must complete the tax return and pay the tax on or before 31 October 2020. However, if you pay and file online through ROS this deadline is extended to 12 November 2020.
There is a surcharge for late pay and file of CAT. The surcharge is based on a percentage of the total tax payable for the year the return is late and graded according to the length of the delay. However, there is an overall cap on the level of the surcharge which is calculated as follows5% surcharge to a maximum of €12,695, if you complete the tax return and pay the tax within 2 months of the pay and file date.
- 10% surcharge up to a maximum of €63,485, if you do not complete the tax return and pay the tax within 2 months of the pay and file date.
In certain circumstances, it is possible to pay the tax by instalments over a period not exceeding 60 months. This applies to any property where the beneficiary does not have full and complete ownership.
It also applies if the benefit is full and complete ownership of the following:
- Property which cannot be moved (for example, lands or a house) or
- Property which can be moved and is agricultural or business property
Revenue can consider allowing a postponement of tax due if there is hardship involved.