Gift / Inheritance Tax

Rates

If you receive a gift, you may have to pay gift tax on it. If you receive an inheritance following a death, it may be liable to inheritance tax. Both these taxes are types of Capital Acquisitions Tax.

The benefit (the gift or inheritance) is taxed if its value is over a certain limit or threshold. Different tax-free thresholds apply depending on the relationship between the disponer (the person giving the benefit) and the beneficiary (the person receiving the benefit). There are also a number of exemptions and reliefs that depend on the type of the gift or inheritance.

If you receive a gift or inheritance from your spouse or civil partner, you are exempt from Capital Acquisitions Tax.

The tax applies to all property that is located in Ireland. It also applies where the property is not located in Ireland but either the person giving the benefit or the person receiving it are resident or ordinarily resident in Ireland for tax purposes.

Budget 2020: The Group A tax-free threshold, which applies primarily to gifts and inheritances from parents to their children, will increase from €320,000 to €335,000. This increase applies to gifts or inheritances received on or after the 9 October 2019. There is no change to Group B or Group C tax-free thresholds.

Portion of taxable value of benefits	% (From 08/04/09)	% (From 07/12/11)	% (From 06/12/12)

The threshold amount	Nil	Nil	Nil

The balance	25	30	33

Notes

The rates of inheritance tax and gift tax are applied by reference to the aggregate of all taxable inheritances and taxable gifts taken after 5th December 1991 by the beneficiary being taxed. Inheritances or gifts taken before 5th December 1991 are not aggregated in relation to inheritances or gifts taken on or after that date.
Tax rates were considerably higher for benefits taken prior to 1st December 1999 and differed between gifts and inheritances.
For the purpose of Gift and Inheritance Tax, the relationship between the person who provided the gift or inheritance (i.e. the Disposer) and the person who received the gift or inheritance (i.e. the beneficiary), determines the maximum tax free threshold – known as the “group threshold”.
For the new indexed threshold amounts, see table below.

Indexed Threshold Amounts

Group A applies where the beneficiary, the person receiving the benefit, is a child of the person giving it. This includes a stepchild or an adopted child.

It can also include a foster child if the foster child resided with and was under the care of the disponer and they provided the care, at their expense, for a period or periods totalling at least 5 years before the foster child reached the age of 18. This minimum period does not apply in the case of an inheritance taken on the date of death of the disponer. In this case the Group A threshold will apply provided that the foster child had been placed in the care of the disponer prior to that date.

Group A also applies to parents who take an inheritance from their child but only where the parent takes full and complete ownership of the inheritance. If a parent receives an inheritance where they do not have full and complete ownership of the benefit, or if a parent receives a gift, then Group B applies.

Group B applies where the beneficiary is the:

Parent – see also Group A above
Grandparent
Grandchild or great-grandchild – see below
Brother or sister
Nephew or niece of the giver – see below

Group C applies to any relationship not included in Group A or Group B.

Group	Gift or inheritance in
Group	07 December 2011 – 05 December 2012	06 December 2012 – 13 October 2015	14 October 2015 – 11 October 2016	12 October 2016 – 09 October 2018	10 October 2018 – 08 October 2019	On or after 9 October 2019

Group A	€250,000	€225,000	€280,000	€310,000	€320,000	€335,000

Group B	€33,500	€30,150	€30,150	€32,500	€32,500	€32,500

Group C	€16,750	€15,750	€15,075	€16,250	€16,250	€16,250

* In certain circumstances a parent taking an inheritance from a child can qualify for the Group A threshold.

Agricultural ReliefYou can claim Agricultural Relief if you receive a gift or inheritance of agricultural property and you qualify as a farmer. This relief reduces the taxable value of the property, including land, by 90%. If the agricultural property comprised in your gift or inheritance does not qualify for Agricultural Relief, it may qualify for Business Relief. To qualify as a farmer, the value of your agricultural property must make up 80% of your total property value on the valuation date. This is called the ‘Farmer Test’. This does not apply where agricultural property consists only of trees and underwood. If the valuation date is on or after 1 January 2015, to qualify as a farmer you must also either farm the agricultural property on a commercial basis for at least six years from that date or lease the property to someone who farms the agricultural property on a commercial basis for at least six years from that date.

DisclaimerWhilst every effort has been made to ensure the accuracy and reliability of the information published within this website, you choose to use this information and rely on any results at your own risk. We will not under any circumstances accept responsibility or liability for any losses that may arise from a decision that you may make from the use of, or reliance on this information.

Additionally, the person receiving the gift or inheritance, or the person leasing the property must either have an agricultural qualification (as listed in Schedule 2, 2A or 2B of the Stamp Duties Consolidation Act 1999) or farm the agricultural property for at least 50% of his or her normal working hours.

Morrissey McCrann & Co.

Gift / Inheritance Tax

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