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Completing your gift or inheritance tax return (IT38)

  1. Overview
  2. Filing obligations for beneficiaries
  3. Filing obligations for disponers
  4. How do you file?
  5. File additional benefits or amend a filed return
  6. Expressions of doubt
  7. How to pay your Capital Acquisitions Tax (CAT) online
  8. What is a disclaimer of a benefit?

What is a disclaimer of a benefit?

If you receive an inheritance and you decide not to accept it, then you may disclaim the benefit. If you disclaim you do not have to pay Capital Acquisitions Tax (CAT). The benefit must be disclaimed before you have accepted or taken possession of it.

If you disclaim a bequest under a will, that property falls into the residue of the estate. You may disclaim specific bequests under a will and accept others.

If a residuary legatee disclaims, the residue is distributed under intestacy rules. If you inherit an interest in the residue of an estate, you cannot partly disclaim.

The residue is the part of a deceased's estate that remains after the payment of all debts, administrative expenses and bequests.

If a life interest or other limited interest is disclaimed, the remainder interest is accelerated. This means the remainderman takes an absolute interest in the property.

If joint tenants received a benefit, one of two or more joint tenants cannot disclaim. In order to be a disclaimer all the joint tenants must disclaim.

When you disclaim a benefit you cannot specify what is to happen to that benefit. If you pass your benefit to another person this is not a disclaimer and both you and that person may have to pay CAT.

You can give up a benefit in return for a payment. The payment then becomes the inheritance. You may have to pay CAT on that payment.

  • Example 1

    John dies on 10 January 2016. In his will he leaves €60,000 to his brother, Michael. The rest of the estate he leaves to his daughter, Mary.

    Michael decides not to accept the €60,000. The €60,000 becomes part of the remainder of the estate and is inherited by Mary.

    Michael does not have to pay CAT, as he has disclaimed the benefit.

    Mary has inherited the entire estate from her father and has taken no benefit from Michael.

  • Example 2

    Maureen, a widow, dies on 12 March 2017, leaving her estate equally to her three children, Noel, John and Mary.

    Noel, who lives abroad, disclaims his share. This share then passes  equally to John and Mary.

  • Example 3

    Paula inherits a house from her aunt, Nora, but disclaims the inheritance in favour of her brother, Tom.

    As you cannot give up a benefit in favour of someone else, this is both:

    an inheritance taken by Paula from Nora
    and
    a separate gift by Paula to Tom.

    Both Inheritance Tax and Gift Tax are due in this situation.

  • Example 4

    Patrick dies and leaves his farm, valued at €350,000, to his son, Robert. The remainder of his estate he leaves to his daughter, Sheila.

    Robert, who has no interest in farming, decides to disclaim the farm and instead takes a payment of €250,000 from the estate.

    Robert is treated as having inherited €250,000 from his father.

    Sheila is treated as taking an inheritance of the farm and the rest of the estate, less the €250,000 passing to Robert.

Published: 15 September 2023 Print this page

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