Credits you can claim against Capital Acquisitions Tax (CAT)

Credit for Capital Gains Tax (CGT)

If CGT and CAT are due on the same event and on the same property, you may be entitled to a tax credit. The CAT payable by the beneficiary may be more or less than the CGT paid by the disponer. This is because the methods for calculating CAT and CGT are different. This can happen when:

  • you receive gifts of property, stocks and shares
  • a life tenant dies and a further life interest arises. A life tenant is a person who inherits an asset for their lifetime. When the life tenant dies the life interest passes to another named person, or back to the estate.
  • a property is appointed by discretionary trustees from a discretionary trust (from a will or settlement)
  • a trust is broken up early.

You can use the CGT you have paid as a credit against the CAT. The credit cannot be greater than the amount of CAT which is due on the gift or inheritance.

Clawback of credit

If you have received a gift or inheritance on or after 21 February 2006, and you sell it within two years, the credit will be clawed back.

Next: Credit for double taxation