Inheritance Tax

What is Inheritance Tax?

Inheritance Tax is a tax which can arise where a beneficiary receives an inheritance as a result of someone dying. The beneficiary is responsible for paying the tax. An inheritance can be taken under a will or intestacy - or in some other way such as, for example, where an asset in the joint names of the deceased and another person is taken, on the death of the deceased, by that other person as survivor.

How will I know if I have to pay Inheritance Tax?

In this regard a distinction is made between surviving spouses, surviving civil partners and other beneficiaries.

Surviving Spouse or Surviving Civil Partners

If you are a surviving spouse OR surviving civil partners taking an inheritance from your deceased spouse or civil partner, the inheritance is completely exempt and, no matter how valuable, will not be liable to Inheritance Tax.

Other Beneficiaries

In the case of other beneficiaries, whether or not Inheritance Tax may be payable on your inheritance depends on whether:

  • the total value of all gifts and inheritances
  • received by you - the beneficiary
  • from the deceased and from anybody else to whom the same group threshold applies
  • in the period from 5th December 1991 up to (and including) the date of the inheritance exceeds a tax-free element called the "tax-free amount".

What rates of Tax Apply?

The following rates of Inheritance Tax apply:

Rates of Inheritance Tax that apply
Up to the "tax-free" threshold amount Nil
Remainder 33%

Historic CAT Rates

How and when do I have to pay the tax?

Inheritance Tax is a Self Assessment tax. The obligation to make a return to the Revenue Commissioners rests with the person who receives the inheritance. An IT38 Return (Inheritance Tax/Gift Tax Return) must be filed when an inheritance either by itself or when aggregated with prior benefits taken by the donee, exceeds 80% of the appropriate tax-free amount. Where an inheritance is made on or after 11 February, 1999, the donor is obliged to make a return in certain circumstances. Where the inheritance is received on or after 14 June 2010 and any relief or exemption is claimed, the IT38 must be filed online through ROS, Revenue's online service. A guide to completing the return and paying the tax can be found at the following link: IT39 - Guide to completing the IT38 return (Pay and File)

Are there any reliefs / exemptions?

In addition to the exemption for a surviving spouse or surviving civil partner, there are a number of other important exemptions and reliefs available, including reliefs for agricultural and business property and exemption for certain dwelling-houses.

What assets are liable to Irish Inheritance Tax?

An asset will be liable to Irish inheritance tax :

  1. if the asset is located in Ireland, or
  2. if the asset is located abroad, and the deceased or beneficiary is resident or ordinarily resident in Ireland.

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CAT thresholds, rates & aggretation rules

Where can I get further information?

If you have an inheritance tax query you should contact your local Revenue office.In the Contact section you will find a full list of Revenue's Offices throughout the country together with addresses, telephone number, fax numbers and e-mail addresses.

Further information in relation to Inheritance Tax (Capital Acquisitions Tax).

July 2011

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