Credits you can claim against Capital Acquisitions Tax (CAT)

Double Taxation Relief (UK)

The treaty between Ireland and the United Kingdom (UK) covers Capital Acquisitions Tax (CAT) in Ireland and Inheritance Tax in the United Kingdom (UK).

The person who inherits the remainder of an estate after all debts and legacies have been paid is called the residuary legatee. It is generally this person who receives the relief.

The person who receives the relief must pay tax in Ireland in order to avail of a credit for UK Inheritance Tax paid.

The main points of the treaty are as follows:

• Ireland will give credit for tax paid on UK property based on the lower of the UK or the Irish tax effective rates.
• The credit given cannot be greater than the Irish tax paid.
• The person entitled to the credit is the residuary legatee except where there is a specific devise or bequest of foreign property. A devise is real property and a bequest is personal property. In that case, the specific devisee or legatee gets the credit for UK tax paid.
• If you inherit UK property, you can claim a credit against your CAT liability provided UK Inheritance Tax was paid on that property.

The treaty ensures that the country where the property is not situated gives a credit for tax paid in the country where the property is situated.

Credit is given only when the same property is taxed, in both countries, on the same event. It is given only to the person who incurred tax in both countries.

Note

Please see Statutory Instrument No.279 of 1978 for further guidance on the Double Taxation Relief of estates of deceased persons, inheritances and gifts.

How do you claim Double Taxation Relief (UK)?

To claim the relief, a CAT Form IT38 Return must be filed online through the Revenue Online Service (ROS) or myAccount. The UK tax authorities, His Majesty's Revenue and Customs (HMRC), provide a certificate of Inheritance Tax paid in the UK. This must be submitted to the CAT unit in support of your claim. The certificate confirms the following:

• the total UK inheritance tax on the property
• the property and its value on which UK tax was charged
• the date the tax was paid
• that the tax was calculated in accordance with the treaty
• that the tax is final, and no application for a refund of UK tax is pending
• that if a refund is subsequently made by the UK, the Revenue Commissioners will be notified.

This certificate must be retained for six years and be available for audit, if required by Revenue.

Time limit for claiming Double Taxation Relief

There is a time limit for claiming the relief or a related refund of tax. You need to apply within six years from the date of the event in respect of which the claim is made.

Next: Double Taxation Relief (US)