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You may have received
one of the following…
AN INHERITANCE
A GIFT
If this is the case, you might have to file a Tax Return.
Gift and Inheritance tax, also known as Capital Acquisitions Tax (CAT) may be due on assets you receive from a person’s estate when they die. Tax may also be due on gifts you receive.
Estates typically consist of assets like money, shares, property and possessions. The amount of tax you must pay depends on the value of the estate and the current CAT rate.
CAT is due on all inheritances over certain thresholds. The tax-free threshold depends on your relationship to the deceased person.
Your Lifetime Inheritance Tax Thresholds
You pay inheritance tax on the total of all the gifts or inheritances that you have received throughout your lifetime.
So, if you’ve previously had an inheritance, this will go towards your group allowance.
Let’s look at an example
Jane received a gift from her Auntie in 2015 worth €25,000, leaving her with €15,000 of her Group B allowance.
When she received an inheritance from her Brother in 2019 worth €30,000, she would only have to pay CAT on €15,000, after using up what’s left of her Group B allowance.
Let’s look at an example
Jane received a gift from her Auntie in 2015 worth €25,000, leaving her with €15,000 of her Group B allowance.
When she received an inheritance from her Brother in 2019 worth €30,000, she would only have to pay CAT on €15,000, after using up what’s left of her Group B allowance.
Be mindful of the 80% threshold
Once you have reached 80% or above of the threshold in any group you are required to file an IT38 return with Revenue, even though no tax may be due.
Capital Acquisitions Tax is currently set at 33% and has remained the same since 2012.
