Irish Acquisition Tax!

When making a will it’s important to have at least a basic understanding of capital acquisitions tax (“CAT”).
CAT includes both inheritance tax and gift tax. Inheritance tax is a form of tax which applies at the rate of 25% of the value of a benefit received by a beneficiary on the death of someone. In other words, it is a tax on the property and other assets that people receive from you, when you die. Gift tax is a tax payable by the recipient on gifts received (otherwise than on the death of someone) at the rate of 25%. Both inheritance tax and gift tax are payable by the beneficiary.

When it comes to CAT, everyone is allowed to receive a certain amount without being liable to pay tax - but above this figure, they will be required to pay tax on any surplus they receive. There are also a number of other exemptions and reliefs from CAT.

Example of where relief can be applied include:

Group A
This group is directed at parents.

• The prerequisite for the inheritance is the passing of the entire inheritance to the parents and where the parents retain complete ownership of the inheritance

• If only a proportion is passed to the parent’s, they are assessed under group B

Group B
This group is directed to beneficiaries who fall under the following blood relationships:

• Parent (if not subject to relief in Group A)

• Grandparent

• Grandchild or Great Grandchild

• Brother or Sister

• Niece of Nephew
  

Group C

This group is directed towards beneficiaries who do not fall

under the categories outline in Group A or Group B.