The tax on a person’s estate after they’ve died is called Capital Acquisitions Tax (CAT), which is a type of inheritance tax. In this article, you’ll discover what Irish inheritance tax is, who has to pay it, how it’s calculated, and if there are ways you may be able to reduce the amount you’ll pay in 2024.
Capital Acquisitions Tax is paid on a person's estate when they pass away
The tax is applicable to all property in Ireland, and the standard rate for 2024 is 33%
Some things, like gifts given or received by a civil partner or spouse, are exempt from inheritance tax
Capital Acquisitions Tax is the tax payable on the estate of someone who has passed away. Estates are made up of various assets, for example, money, property, pensions and possessions. How much tax you’ll need to pay will depend on the entire value of the estate.
You can receive gifts and inheritances up to a set value over your lifetime before having to pay Capital Acquisitions Tax. Once due, it is currently charged at the rate of 33%, on gifts or inheritances made on or after 5 December 2012.
It falls to the recipient or beneficiary to pay the inheritance tax (IHT), and is applicable to all property in Ireland.
Capital Acquisitions Tax is also payable by the recipient on property located outside of Ireland if the person either giving or receiving the inheritance is resident in Ireland for tax purposes.
Irish Inheritance tax must be paid by the 31st October for any inheritance dated in the year to the 31st of the previous August.
This means that if you inherit a property any time between 1st September and 31st August, you must pay Inheritance or Capital Acquisitions Tax by the 31st October.
For example, if you inherited a property on 3rd September 2023, you will have to pay CAT by 31st October 2024. If you inherited on 30th August 2023, you would have still had to pay CAT by 31st October 2023.
You must complete form IT38 for a gift or inheritance tax return, and you can pay CAT online. Note that you will be charged a percentage of the tax you owe if you pay late, as is the case with late payments on other types of taxes.
The standard rate for inheritance tax in Ireland in 2024 is 33%.
However, there are exemptions to paying inheritance tax (more on those below). These exemptions depend on the relationship between the recipient of the inheritance and the person you are inheriting from.
A disponer is the person who gives you the gift or inheritance, and the beneficiary is the person who receives the gift or inheritance. A gift become inheritance if the disponer dies within two years of giving the gift.
Firstly, gifts and inheritances given or received by a civil partner or spouse are exempt from CAT. If you are a widow, widower or a surviving civil partner, you may be eligible for additional relief. You also do not need to pay CAT on a gift with a value of €3,000 or less from any one person in any one calendar year.
Tax-free thresholds depend on your relationship with the disponer (the person giving the gift or inheritance).
Group A | Group B | Group C | |
---|---|---|---|
Tax-free threshold | €335,000 | €32,500 | €16,250 |
This threshold applies if you, as a beneficiary, are | A child, including adopted, step- and foster (in some circumstances), of the disponer or the disponer’s civil partner; a minor grandchild of the deceased disponer if their child (your parent) is also deceased; a parent inheriting an absolute interest of an inheritance on the death of your child | A parent of the disponer, where you take limited interest or a gift; siblings of the disponer; a child of a brother or sister of the disponer; nieces and nephews of the disponer; a lineal ancestor, such as a grandchild of the disponer | Someone with a relationship to the disponer, on the date of the gift or inheritance, that isn’t covered in the other groups |
As announced in Budget 2025, the CAT Group thresholds will be increased next year:
There are also three instances in which you may be exempt from paying any inheritance tax.
1. If you have inherited a property at some point since 25th December 2016, and you meet all the following criteria:
2. If your inheritance comes from your spouse or civil partner.
3. If the deceased is a child who has taken a non-exempt gift or inheritance from a parent within the previous five years, the parent is then exempt from inheritance tax.
With careful planning, the tax bill beneficiaries pay on inheritance tax can be reduced. If you have leftover inheritance, you may want to consider saving it in a term deposit, which guarantees you a fixed interest rate.
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This information does not constitute financial advice. You should always do your own research to ensure that investments are right for your specific circumstances.