Gift and Inheritance Tax (Capital Acquisitions Tax – CAT)

How do you calculate CAT?

The amount of CAT you pay on a gift or inheritance depends on:

  • its value
  • your relationship to the person who gave it to you
  • whether you have received other gifts or inheritances.

You do not have to pay tax on a gift or inheritance if its value is below the group tax free threshold and aggregation rules do not apply. The threshold you use depends on your relationship to the person who gave you the gift or inheritance.

To calculate how much CAT you have to pay, you need to know your correct group threshold and rate of tax. These are determined by the date of the gift or the date of the inheritance. You will also need to know the value of the benefit you received on the valuation date.

You only have to pay tax on the value of a gift or inheritance above the group tax-free threshold amount. You can reduce this taxable amount through relevant reliefs and exemptions.

You must add any previous gifts and inheritances received under the same group threshold for the purposes of calculating CAT.

Gift splitting

If a gift is passed on to someone in a different group within three years of when it was received it is called gift splitting. Gift splitting affects the threshold used.

CAT paid by the disponer

The person who gives you the gift or inheritance may pay the tax on your gift or inheritance in advance. This person is the 'disponer'. In this case, your inheritance amount increases by the amount of tax that they paid.

The calculations will be made automatically when you use Revenue Online Service (ROS) to submit your tax return.

Next: How and when do you pay?