Suppose a child inherits 500,000 euro from a parent. A child falls into Group A, which has a lifetime tax free threshold of 400,000 euro for 2025. Only the amount above the threshold is taxable, so 100,000 euro is subject to Capital Acquisitions Tax. At the flat 33% rate that is 33,000 euro of tax, leaving a net inheritance of 467,000 euro. If the same 500,000 euro came from a sibling instead, the Group B threshold of 40,000 would apply, making 460,000 taxable and the tax 151,800 euro. The relationship to the person who died therefore changes the bill dramatically.
How it is calculated
Capital Acquisitions Tax applies to gifts and inheritances above a lifetime threshold set by your relationship to the giver. Group A, mainly children inheriting from a parent, has the highest threshold at 400,000 euro for 2025, Group B for siblings and other close relatives is 40,000, and Group C for everyone else is 20,000. Only the value above the relevant threshold is taxed, and the rate is a flat 33%. Thresholds are cumulative, so all gifts and inheritances received within the same group since December 1991 count towards the limit. Certain reliefs, such as the dwelling house exemption and agricultural or business relief, can reduce or remove the charge where conditions are met. This calculator assumes the basic threshold with no extra reliefs.
Frequently asked questions
How does Irish inheritance tax work?
Capital Acquisitions Tax is charged at 33% on the value of an inheritance above your lifetime group threshold. For 2025 the thresholds are 400,000 euro from a parent (Group A), 40,000 from a sibling or other close relative (Group B), and 20,000 from anyone else (Group C). Thresholds are cumulative across gifts and inheritances within the same group since 1991.
Are spouses exempt from CAT in Ireland?
Yes. Inheritances and gifts between spouses and civil partners are fully exempt from Capital Acquisitions Tax under Section 70 of the Capital Acquisitions Tax Consolidation Act 2003. The exemption applies regardless of the amount transferred, so a surviving spouse pays no CAT on any inheritance from their partner.
What is the dwelling house exemption for CAT?
Revenue allows an inheritance of a house to be fully exempt from CAT if the beneficiary lived in the property as their main residence for at least three years before the inheritance date, did not own any other residential property on that date, and continues to occupy the house as their main residence for six years after. The exemption can be lost if the property is sold within that six-year period without replacing it with another qualifying residence.
Do lifetime gifts count toward the CAT threshold?
Yes. The CAT group thresholds are lifetime and cumulative. Revenue adds together all gifts and inheritances you have received within the same group category since 5 December 1991 when calculating whether you have exceeded your threshold. A small annual gift exemption of 3,000 euro per donor per year is excluded from this cumulative total, meaning regular annual gifts below that amount do not erode your lifetime threshold.