Capital Acquisitions Tax is charged at 33% on gifts or inheritances made on or after 5 December 2012 (the rate was formerly 30%). This only applies to amounts over the group threshold. For example, if you have received gifts from your parents with a taxable value of €550,000, you only pay tax on the amount over the appropriate group threshold (Group A threshold since 9 October 2019: €335,000). So €215,000 is taxed at 33%.
Exemptions
The following are exempt from Capital Acquisitions Tax:
- Gifts or inheritances from a spouse or civil partner
- Payments for damages or compensation
- Benefits used only for the medical expenses of a person who is permanently incapacitated due to physical or mental illness (pdf)
- Benefits taken for charitable purposes or received from a charity
- Winnings from a lottery, sweepstake, game, or betting
- Retirement benefits and pension and redundancy payments are not usually liable to Gift Tax. However, if the employee is a relative of the employer, or the employer is a private company and the employee is deemed to control the company, Revenue may disallow this exemption if they consider the payment excessive.
- Reasonable support for the maintenance or education of a child or spouse or civil partner.
Other exemptions
The first €3,000 of the total value of all gifts received from any one person in any calendar year is exempt. So, you could receive a gift from several people in the same calendar year and the first €3,000 from each person is exempt from CAT. This exemption does not apply to inheritances.
If you receive a gift or inheritance of a house that has been your main residence, it may be exempt from tax if you do not own or have an interest in any other house. There are conditions on how long you must be resident in the house before and after receiving the benefit.
If a parent receives an inheritance from their child, and takes full and complete ownership of the inheritance, it is usually taxable under Group A. But it is exempt if, in the previous 5 years, the child took an inheritance or gift from either parent and it was not exempt from Capital Acquisitions Tax.
Payments that reduce the debt of a bankrupt or near-bankrupt are usually exempt (Section 82, Capital Acquisitions Tax Consolidation Act 2003).
Other exemptions relate to certain Irish Government securities or unit trusts where the beneficiary is non-resident.
If you receive a gift or inheritance of a house that has been your main residence, it may be exempt from tax if you do not own or have an interest in any other house. There are conditions on how long you must be resident in the house before and after receiving the benefit.
If a parent receives an inheritance from their child, and takes full and complete ownership of the inheritance, it is usually taxable under Group A. But it is exempt if, in the previous 5 years, the child took an inheritance or gift from either parent and it was not exempt from Capital Acquisitions Tax.
Payments that reduce the debt of a bankrupt or near-bankrupt are usually exempt (Section 82, Capital Acquisitions Tax Consolidation Act 2003).
Other exemptions relate to certain Irish Government securities or unit trusts where the beneficiary is non-resident.