Inheritance and Estate Tax in Ireland

What is Capital Acquisitions Tax and who pays it?

Ireland levies a single combined inheritance and gift tax called Capital Acquisitions Tax (CAT), governed by the Capital Acquisitions Tax Consolidation Act 2003 (CATCA 2003). Unlike the UK Inheritance Tax, which is charged against the estate before distribution, CAT is charged on the beneficiary -- the person who receives the gift or inheritance. Each beneficiary has a lifetime cumulative threshold determined by their relationship to the person giving the property (the disponer). Once the threshold is exhausted across all gifts and inheritances received from the same relationship group since 5 December 1991, any further amounts are taxable at the flat rate of 33%. Because the threshold is lifetime and cumulative, every qualifying gift received during the disponer's life erodes the same threshold used at death. Revenue administers CAT and publishes detailed guidance at revenue.ie. [1]

What are the 2025 group thresholds and the 33% rate?

Budget 2025, announced on 1 October 2024, raised all three group thresholds. The new amounts apply where the date of the gift or the date of death falls on or after 2 October 2024. [2]

Group A was raised from EUR 335,000, Group B from EUR 32,500, and Group C from EUR 16,250 -- the first material upward adjustment since 2019. The 33% rate itself has been unchanged since 2013 and applies to taxable value above the threshold. Revenue publishes the current and historical thresholds at revenue.ie -- CAT thresholds. [2]

The SVG below illustrates the three threshold tiers:

Are spouses and civil partners exempt from CAT?

Yes, fully. Under Section 70 CATCA 2003, gifts and inheritances between spouses or civil partners are completely exempt from CAT -- there is no cap and no threshold to consume. The exemption covers both inter-spouse gifts made during life and property passing on death. Civil partnerships registered under the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 receive identical treatment to marriage. Cohabiting partners who are not married and have not registered a civil partnership do not receive this exemption; they are treated as Group C beneficiaries with a EUR 20,000 lifetime threshold. Revenue confirms the spousal exemption at revenue.ie -- transfers between spouses or civil partners. [1]

The small gift exemption under Section 69 CATCA 2003 supplements the group thresholds: any person can give up to EUR 3,000 per calendar year to any individual free of CAT. The EUR 3,000 limit applies per donor-donee pair, resets each calendar year, and does not carry forward. Crucially, amounts within the small gift exemption are not aggregated against the lifetime group threshold -- they leave the threshold intact. Two parents can each give EUR 3,000 to a child each year, so a child may receive EUR 6,000 per year from both parents combined with zero threshold erosion. Revenue confirms this at revenue.ie -- small gift exemption. [3]

What is the Dwelling House Exemption?

Section 86 CATCA 2003 provides a full exemption from CAT on the inheritance of a dwelling house, provided all of the following conditions are met at the date of inheritance: [4]

• The beneficiary must have lived in the house as their only or main home for the 3 years immediately before the date of inheritance.
• The beneficiary must not own or have a beneficial interest in any other dwelling at the date of inheritance.
• The disponer must have used the house as their only or main home at the date of death (this condition does not apply where the beneficiary is a dependent relative).
• The house must continue to be the beneficiary's only or main home for 6 years after the date of inheritance.

Three exceptions relieve the 6-year post-inheritance occupancy requirement: the beneficiary is aged 65 or over at the date of inheritance; employment requires the beneficiary to reside elsewhere; or a certified mental or physical infirmity requires the beneficiary to live elsewhere.

For lifetime gifts (rather than inheritances at death), the relief is narrower following 2017 amendments: the disponer must be a qualifying person incapable of self-care. This largely confines the relief to inherited dwellings and prevents its use for straightforward parent-to-child lifetime transfers of the family home.

What are Agricultural Relief and Business Relief?

Two major 90% reliefs reduce the taxable value of qualifying assets:

Agricultural Relief (Section 89 CATCA 2003) reduces the taxable value of qualifying agricultural property by 90%, so CAT is computed on only 10% of the property's market value. To qualify, the beneficiary must pass the farmer test: at least 80% of the beneficiary's total property (after receiving the inheritance or gift) must consist of agricultural property. The beneficiary must also satisfy the active farmer test: they must farm the land commercially for at least 50% of their normal working time (or lease it long-term to a qualifying active farmer) for at least 6 years after the valuation date. Budget 2025 extended the active farmer test to the disponer: from 1 January 2025, the person giving the agricultural property must also have farmed it (or leased it to an active farmer) for at least 6 years before the date of the gift or inheritance (with transitional rules for the period 2025-2030). Revenue details the conditions at revenue.ie -- agricultural relief. [5]

Business Relief (Section 92 CATCA 2003) applies a parallel 90% reduction to qualifying business assets: shares in private trading companies (typically requiring a 5%+ holding), partnership interests, and sole-trader business assets. The disponer must have owned the qualifying business property for at least 5 years before the gift or inheritance. The beneficiary must retain the qualifying assets and continue the qualifying business activity for at least 6 years after the transfer -- early disposal triggers a clawback of the relief. Investment activities (passive rental portfolios, share-dealing as a primary activity, pure holding-company structures) do not qualify. Revenue details business relief at revenue.ie -- business relief. [5]

For a qualifying family business valued at EUR 2 million transferring from parent to child (Group A, threshold fully available): the 90% Business Relief reduces the taxable value to EUR 200,000; after the EUR 400,000 Group A threshold, there is no taxable amount and no CAT arises. Without Business Relief, the taxable amount would be EUR 1.6 million (EUR 2m minus EUR 400,000 threshold), attracting EUR 528,000 in CAT.

When and how is CAT paid and filed?

CAT is a self-assessment tax. The beneficiary computes their own liability and submits a return using Form IT38 (or the simplified IT38S where no reliefs or exemptions are being claimed) via Revenue's Online Service (ROS) or myAccount. [6]

The pay-and-file deadline is 31 October, with the year depending on the valuation date:

• Valuation date between 1 January and 31 August: pay and file by 31 October of that same year.
• Valuation date between 1 September and 31 December: pay and file by 31 October of the following year.

A return is required whenever the cumulative taxable value of gifts and inheritances from the relevant group reaches 80% of the applicable group threshold. This reporting trigger can arise even where no CAT is due -- for example, where a beneficiary receives a Group A gift of EUR 320,000, which is 80% of EUR 400,000, a return is required even though the amount is below the threshold.

For broader Irish tax context, see the Ireland country overview and the Ireland capital gains tax page for how Capital Gains Tax (CGT) applies when inherited assets are later sold. The rules described here are general and subject to change; a qualified tax professional or solicitor with CAT experience can assess how they apply to a specific estate.