Mary who was domiciled in Ireland dies in 2014 leaving all of her property to her granddaughter, Gráinne. Mary’s estate consists of Irish property valued at €250,000 and property in Country A valued at €190,000. Country A does not have a Double Taxation Treaty in place with Ireland. Gráinne has no Group B tax-free threshold available to her. Country A charges tax at a rate of 30%.
Calculation of Irish CAT due on foreign property
|Country A tax paid @30%
|Irish CAT @33%
|Less unilateral relief for Country A tax paid
|Less available Group B tax-free threshold
|Net Irish CAT due on foreign property
In this case, full credit is available on the foreign property. This is because the amount of tax paid in Country A is less than that in Ireland.