Capital Acquistion Tax
If you receive a gift or inheritence you could be liable to Capital Acquistion Tax or sometimes referred to as “gift tax“. You are obliged to inform the Revenue Commissioners of your gift/inheritence and failure to do so could give rise to penalties. There are various reliefs and exemptions available and our expert advice should be sought before receiving or inheriting any asset.
The tax-free thresholds have been reduced by 20% approximately. The new tax-free thresholds apply to gifts and inheritances taken on or after 8 December 2010.
The new tax-free thresholds (after indexation) are as follows:
Group A €332,084
Applies where the beneficiary is a child (including adopted child, step-child and certain foster children) or minor child of a deceased child of the disponer. In certain circumstances parents also fall within this threshold where they take an inheritance from a child.
Group B €33,208
Applies where the beneficiary is a brother, sister, niece, nephew or lineal ancestor or lineal descendant of the disponer.
Group C €16,604
Applies in all other cases
CAT Filing Dates
30th September 2011 is the pay and file deadline for gifts and inheritances with a valuation date in the 12 month period ending on 31 August 2011.
The Finance Act 2011 brought forward the pay & file date for CAT by one month to 30 September. This means that where the valuation date arises between 1 September 2010 and 31 August 2011, the pay and file deadline is 30 September 2011.
This means that where the valuation date arises between 1 September 2010 and 31 August 2011, the pay and file deadline is 30 September 2011
If the valuation date is between 1 September 2011 and 31 December 2011 you must complete the tax return and pay the tax on or before 30 September 2012.
In the case of an Inheritance, the Valuation Date is normally the earliest of the following dates:
- the date the subject matter of the inheritance can be retained for the benefit of the beneficiary;
- the date it is actually retained for the benefit of the beneficiary;
- the date it is transferred or paid over to the beneficiary.
Valuation Date will normally be the date of death in the following circumstances:
- gift made in contemplation of death (Donatio Mortis Causa);
- where a power of revocation has not been exercised;
- where property passes by survivorship or under a trust.
