Guide to CAT - Exemption of certain receipts
Legislation - Section 82, Capital Acquisitions Tax Consolidation Act 2003.
Certain receipts are exempt from Capital Acquisitions Tax;
- the receipt by a person of any sum bona fide by way of compensation or damages for any wrongdoing or injury suffered by him in his person, property, reputation or means of livelihood, e.g. damages for personal injuries as a result of a car accident.
- the receipt by a person of any sum bona fide by way of compensation or damages for any wrong or injury resulting in the death
- of any other person, e.g. damages awarded to a child arising out of the accidental death of a parent.
- the receipt by a person of any sum bona fide by way of winnings from betting or from any lottery, sweepstake or game with prizes.
- any benefit arising out of -
- the payment to the Official Assignee in Bankruptcy of money which has been provided by friends, or which represents property provided by friends of a bankrupt; or
- a remission or abatement of debts by the creditors of a bankrupt to enable the bankrupt to fulfil an offer of composition after bankruptcy in accordance with the provisions of section 39 of the Bankruptcy Act, 1988; and
- similar benefit in the case of friends or creditors of an arranging debtor where matters have not progressed to a formal bankruptcy stage.
- the receipt in the lifetime of the disponer, by a spouse or civil partner or a child of the disponer or a person in relation to whom the disponer stands in loco parentis, of money or monies worth for support, maintenance or education provided it would be regarded as normal expenditure and is reasonable having regard to the financial circumstances of the disponer.
- After the death of the disponer, payments for maintenance, support and education of a minor child of the disponer are exempt from Inheritance Tax if the child’s other parent is also dead.
July 2011