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 (the disponer) or the person who receives the benefit (the beneficiary). The UK charges tax based on the domicile of the deceased person. Domicile is the place which that person regarded as home.

The person who inherits the remainder of the estate after all debts and legacies have been paid is called the residuary legatee. It is generally this person who receives the relief. This person must pay tax in Ireland in order to qualify for the relief.  

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 you paid UK tax 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 pays the tax in both countries.

How do you claim Double Taxation Relief (UK)?

To claim the relief, a CAT return must be filed online through Revenue’s Online Service (ROS) or myAccount. The UK tax authorities, HM Revenue & Customs, 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.

Note

There is a time limit for claiming a credit 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)