Robert Troy
Question:53. Deputy Robert Troy asked the Minister for Finance to review the bands for inheritance tax in Budget 2025 (details supplied). [23205/24]
View answerWednesday, 22 May 2024
Questions (53)
Written answers
Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances that is payable by the person receiving the gift or inheritance (the beneficiary) and is calculated by reference to the value of the property received.
Where a person receives gifts or inheritances that are in excess of the relevant CAT tax-free threshold (Group threshold), CAT at a rate of 33% applies on the excess. The relationship between the person providing the gift or inheritance (the disponer) and the beneficiary determines the Group threshold below which CAT does not arise. Any prior gift or inheritance received by a person since 5 December 1991 from within the same Group threshold is aggregated for the purposes of determining whether any CAT is payable on a benefit. There are currently three Group thresholds:
• the Group A threshold (currently €335,000) applies, inter alia, where the beneficiary is a child (including certain foster children) of the disponer;
• the Group B threshold (currently €32,500) applies where the beneficiary is a brother, sister, nephew, niece or lineal ancestor or lineal descendant of the disponer;
• the Group C threshold (currently €16,250) applies in all other cases.
In addition to the Group thresholds, the Capital Acquisitions Tax Consolidation Act 2003 provides for a number of reliefs and exemptions from CAT. For example, reliefs are available in relation to gifts and inheritances of agricultural property and certain business property respectively where certain conditions are met. Furthermore, a person may receive gifts up to the value of €3,000 from any person in the same year without having to pay CAT. This is generally referred to as the “small gifts exemption” and gifts within this limit are not taken into account in computing CAT and are not included for future aggregation purposes.
It is important to note that the Group thresholds apply at an individual level. Therefore, where property is provided by way of gift or inheritance to a number of beneficiaries, each beneficiary will have a Group threshold in relation to that gift or inheritance based on his or her relationship with the disponer.
Further information on CAT, including the various CAT reliefs and exemptions, is available on the Revenue website at www.revenue.ie/en/gains-gifts-and-inheritance/index.aspx.
As with all tax heads, CAT will be reviewed as part of the annual Finance Bill process.