Capital Acquisitions Tax exemptions and reliefs

Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances.

Some gifts and inheritances are exempt from CAT, so the tax does not apply. For example, if they are from your spouse or civil partner.

There is an exemption for gifts of up €3,000 a year that you get from the same person.

Some gifts and inheritances get tax relief, which reduces the amount of CAT you have to pay. For example, there are tax reliefs if a gift or inheritance is:

• From your foster parent
• From an aunt or uncle whose business you worked in
• From a relative of your deceased spouse or civil partner
• A business or agricultural property

This page explains the tax reliefs and exemptions for CAT.

All gifts and inheritances have a tax-free threshold, which means that you can get a certain amount tax-free. The amount depends on your relationship to the person you get them from.

Read about the tax-free thresholds, how much the tax is and how to pay it.

If a gift or inheritance is exempt from CAT, you do not have pay the tax on it and it does not count towards your tax-free threshold.

The following are exempt from Capital Acquisitions Tax:

• Gifts or inheritances from your spouse or civil partner.
• Payments for damages or compensation.
• If you are permanently incapacitated, benefits you get that are only for paying your medical expenses.
• Benefits taken for charitable purposes.
• Winnings from a lottery, sweepstake, game or bet.
• Retirement benefits, pension and redundancy payments paid to you by your employer. The exemption may not apply if your employer is a relative or a private company you control and the payments are excessive.
• Gifts for the support, maintenance or education of a child or dependent relative of yours or your spouse or civil partner.
• An inheritance you get from your child if, in the previous 5 years, they took a gift or inheritance from either parent and it was not exempt from CAT.
• A benefit to reduce debt if you are bankrupt or under a debt resolution procedure.
• Certain heritage property.

Small gift exemption

The first €3,000 of the total value of all gifts from any one person in any calendar year is exempt. So, you could get a gift from several people in the same calendar year and the first €3,000 from each person is exempt from CAT.

You do not need to make a Capital Acquisitions Tax return to claim the small gift exemption for gifts under this limit.

This exemption does not apply to inheritances.

Dwelling house exemption

If you get a gift or inheritance of a house that has been your main residence, it may be exempt from tax if you do not own or have an interest in any other house. There are conditions on how long you must be resident in the house before and after receiving the benefit. Read more information about the Dwelling House Exemption on revenue.ie and in Revenue's Manual on the Dwelling House Exemption (pdf).

More information about exemptions

You can get further information on CAT exemptions from Revenue.

Foster child relief

You can claim foster child relief for CAT if:

a) You were placed in the care of a foster parent under the regulations on foster care placement or the regulations on placement with a relative.

or

b) You lived with the foster parent and they cared for you at their expense for at least 5 years. (Before 18 December 2023, this was a necessary requirement in the case of gifts.)

The Group A threshold applies if you are a foster child of the person who gives you the gift or inheritance.

Group B applies to a gift or inheritance you get from another foster child with the same foster parent (since 18 December 2023).

Group B also applies to gifts or inheritances since 18 December 2023 that you get from your foster parent’s:

• Child or the child of their civil partner
• Brother or sister
• Parent, grandparent or great-grandparent

Favourite nephew or niece relief

If you are the nephew or niece of the person who gives you a gift or inheritance, the Group A tax-free threshold may apply if you have worked in their business for the previous 5 years.

Being the nephew or niece of the person giving the benefit means that you are the child of their brother or sister (their sibling) or of their sibling’s civil partner.

To qualify, you must have worked in the business for more than 24 hours per week (or 15 hours per week if the only others who worked there were the giver and their spouse or civil partner).

The relief applies only to assets used in the business. The Group B threshold applies to non-business assets.

Surviving spouse or surviving civil partner relief

This relief applies if your spouse or civil partner has died and you get a gift or inheritance from someone who was more closely related to them than to you. In that case, the group threshold that applies to you is based on the relationship between the giver and your spouse or civil partner.

For example, if you get a benefit from the father of your spouse or civil partner, the group threshold would be Group C. But if you get a benefit from the father of your spouse or civil partner and your spouse or civil partner is deceased, then the group threshold that applies to you would be the same as for a child getting a benefit from a parent, Group A.

Business relief

If you get a gift or inheritance of business property, it may qualify for relief that reduces the taxable value of the property by 90% for CAT. Read more information about CAT business relief on revenue.ie.

Agricultural relief

Tax relief applies to gifts and inheritances of agricultural property which reduces the market value of the property by 90% for CAT. Read more information about CAT agricultural relief on revenue.ie.

You can claim exemptions or reliefs when you make your tax return for CAT.