Capital Acquisitions Tax (CAT) thresholds, rates and aggregation rules

In her will, Sarah leaves a property worth €900,000 equally to her two children, Adam and Louise.

The value of Adam and Louise's benefit is €450,000 each. Neither Adam nor Louise have received any previous gifts or inheritances from either parent. They can both avail of the current Group A threshold of €400,000 in relation to this benefit. As each benefit exceeds the Group A threshold, they must both file an IT38 Return.

Michael dies and, in his will, leaves:

- a house to his mother, Catherine

and

- a bank account to his father, Adam.

As both parents are receiving an absolute inheritance with no conditions attached, Group A threshold applies to Catherine’s and Adam’s benefit from Michael.

Carmel dies and, in her will, leaves:

- shares to her sister, Claire

- the income from the shares to her mother, Ann, for her lifetime

- a dwelling house to Claire

- a life interest in that dwelling house to Ann

and

- a bank account to Ann.

In this instance, two group thresholds will apply to Ann’s inheritance.

Group A threshold applies to the bank account as this is an absolute interest.

Group B threshold applies to the income from the shares and the life interest in the dwelling house as these are limited interests.

In 2023, Annie receives an inheritance valued at €34,000 from her sister. The Group B threshold at the date of the inheritance is €32,500. Annie has not received any prior gifts or inheritances under the Group B threshold. Annie pays CAT as follows:

On 1 March 2025, Annie receives an inheritance valued at €20,000 from her grandfather. The Group B threshold at the date of the inheritance is €40,000. Annie pays CAT as follows:

In 2023, Annie receives an inheritance valued at €34,000 from her sister. The Group B threshold at the date of the inheritance is €32,500. Annie had not received any prior gifts or inheritances under the Group B threshold. Annie pays CAT as follows:

 On 1 March 2025, Annie receives an inheritance valued at €5,000 from her grandfather. The Group B threshold at the date of the inheritance is €40,000. No CAT is payable by Anne, as follows: