Capital Acquisition Tax Liability

Added: Sunday, September 15, 2013

Capital Acquisition Tax Liability

Capital Acquisition Tax (CAT) is the tax paid on gifts and inheritances. CAT becomes payable when the tax free threshold of the person is exceeded by the value of the gift or inheritance that they receive. Your tax free threshold is determined by the relationship between you and the disponer (person giving you the gift or inheritance). There are three Group Thresholds each with a different tax free amount. Don't hesitate to Contact us in John Nash Solicitors, Galway for further details.

Group A:
Son / Daughter

Group B:
Brother / Sister / Niece / Nephew / Grandchildren *Parents

*( In certain circumstances a parent taking an inheritance from a child can qualify for Group A threshold).

Group C:
Relationship other than Group A or B.

The current tax free thresholds for gifts or inheritances received from 6th December 2012 to the present is as follows;

Group A:

Group B:

Group C:

The tax free thresholds are determined by the Government in each Annual Budget.


How CAT works in practice

If you receive a gift or inheritance below the tax free threshold for the Group Threshold that you fall into you will not have to pay any CAT. However, the amount of the gift or inheritance received reduces the tax free threshold for that Group Threshold by the value of the gift or inheritance.


If you inherit €10,000.00 on the 12th December 2012 from your uncle you fall into the Group B Threshold (€30,150.00). Your inheritance is below the Group B Threshold and therefore you do not have to pay any CAT. However, if you receive another gift or inheritance that also falls into category B i.e Aunt, Uncle or Grandparent your tax free threshold is now reduced by the value of your previous inheritance €10,000.00) and is now €20,150.00.

If you then receive a gift or inheritance from someone in Category A or C your tax free threshold for these groups is not reduced. In order to have the tax free threshold for each Group Threshold reduced you must have received a prior gift or inheritance within that Group threshold.

Capital Acquisition Tax Advice

In order to leave your estate in the most tax efficient manner possible and minimise CAT liability it is essential that you receive advice regarding the manner in which you wish to dispose of your estate. Contact John Nash Solicitors Loughrea, Galway to arrange a consultation and be assured that you are dealing with your estate as tax efficiently as you possibly can.