Gifts and inheritances in Ireland are taxable under the CAT legislation at a current rate of 25%. No CAT is payable where a tax-free threshold is available to an individual.
All benefits taken from the same group since 5 December 1991, are added together to determine if a threshold has been met and if so, tax is calculated by reference to the excess over that threshold.
With effect from 1 January 2010, these tax-free thresholds were decreased by approx 4.4%. Thresholds are reviewed annually by reference to the Consumer Price Index (“CPI”) and 2010 is the first time there has been a reduction in thresholds due to a decrease in the CPI.
| Group | Relationship to Giver | Group Threshold from: | ||
| 01.01.09-07.04.09 | 08.04.09-31.12.09 | 01.01.10 | ||
| A | Son/Daughter | €542,544 | €434,000 | €414,799 |
| B | Parent (in certain circumstances)/ Brother/Sister/Niece/Nephew/Grandchild |
€54,254 | €43,400 | €41,481 |
| C | Relationship other than Group A or B | €27,127 | €21,700 | €20,740 |
It is important to fully utilise these thresholds, as future thresholds may decrease yet further, reducing the tax-free benefit of future gifts.
In addition it should be noted that the first €3,000 taken as a gift from any person in any one year is exempt from tax. Should a gift be greater than this amount, the first €3,000 received in that year is disregarded when ascertaining if one of the group thresholds has been reached.
This article has been authored by Conor Bradbury.
