Credits you can claim against Capital Acquisitions Tax (CAT)

Double Taxation Relief (UK)

The treaty between Ireland and the UK covers CAT in Ireland and Inheritance Tax in the UK. Ireland charges CAT based on the residence of the deceased person or the person who receives the gift (the beneficiary). The UK charges tax on the domicile of the deceased person. Domicile is the place which that person regarded as home.

The person who inherits an estate, after all other costs are paid, is generally the person who receives the tax credit. This person, who is called the residuary legatee, must pay tax in Ireland to qualify for the relief.

The main points of the treaty are as follows:

  • Ireland will give credit for tax on the UK property at whichever is the lower of the UK and Irish tax effective rates.
  • The credit given cannot be greater than the Irish tax.
  • The person who paid the double tax will receive the credit.
  • If you received UK property, you can receive a credit if you paid UK tax on that property. If CAT on the same property is paid by the residuary legatee, then he or she will receive this credit.

How do you claim Double Taxation Relief (UK)?

To claim a tax credit, you must get a letter from the UK tax authority certifying:

  • the total UK inheritance tax on the property
  • the value of the property on which tax was charged
  • the date the tax was paid
  • that the tax was calculated in accordance with the treaty
  • that the tax is final, so no application for a refund of UK tax is pending
  • that if a refund is made by the UK, they will send us notice of that refund.

Note

This certificate must be retained for six years because if you are selected for audit, Revenue will need to see it.  

Next: Double Taxation Relief (USA)