Exemption on retirement benefits

Capital Acquisitions Tax (CAT) exemption applies to retirement benefits, redundancy payments or pension payments paid to you by your employer. 

Revenue may not allow this exemption if the payments are too high and:

  • you are related to your employer
  • your employer is a private company in which you have control.

CAT is payable on any benefits paid to you by the pension scheme of another person. This is because the benefits are not paid by your employer. 

Exemption on inheritance of retirement benefits

If, following the death of a parent, you inherit part of a retirement fund, you will pay:

  • CAT, but not Income Tax (IT) (if you are under 21)
  • IT, but not CAT (if you are 21 or older).

This CAT exemption also applies if you receive an inheritance from a Personal Retirement Savings Account (PRSA).