2020 Irish gift and inheritance. Capital Acquisition Tax (CAT) rate and tax free thresholds

The Irish gift and inheritance tax free amounts (thresholds) have remained constant in recent years except for the child category (A) and the tax rate has remained at 33%.

Gift tax rate and inheritance tax rate

Since 9 October 2019 the Irish gift and inheritance tax (known as capital acquisition tax) lifetime tax free amounts/thresholds (calculated on an aggregated basis for each Group/category of persons)  are currently:

• For a Group A - beneficiary child or minor child of a predeceased child and in certain circumstances widowed spouse/civil partner of a deceased child - tax free amount is currently €335,000;

• For a Group B - beneficiary siblings, other grandchildren and other specified descendants - tax free amount is €32,500;

• For a Group C beneficiary all others - tax free amount is €16,250.

These are lifetime limits.  This means that previous taxable benefits in the same group must be taken into account when calculating the lifetime tax free amount/threshold.

Previous limits can be viewed on the Revenue Commissioners website.

Capital Acquisition Tax rate

The current capital acquisition tax rate is 33%.

The tax payable on a gift or inheritance is 33% of the taxable benefit once the lifetime limit for the Group has been used.

Benefits to a spouse or civil partner are generally exempt from capital acquisition tax unless anti-avoidance rules apply.

There are a number of exemptions and reliefs that may apply to reduce the amount of tax payable.

If you would like to discuss making a will or would like additional information on the tax that arises if you receive a gift or a legacy please contact us to set up an appointment.
 

Disclaimer

The material in this article is for general information purposes only and does not constitute legal or taxation advice. Specific legal and taxation advice should be sought before acting. All information and taxation rules are subject to change without notice.

No liability whatsoever is accepted by M. McLoughlin & Co. for any action taken in reliance on the information in this article

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