Inheritance tax Ireland

Inheritance tax, also known as Capital Acquisitions Tax (CAT), is a tax on gifts and inheritances in Ireland. It's levied on the value of property or money that's passed on from one person to another, either during their lifetime or after their death.

You'll only pay inheritance tax if the value of the gift or inheritance you receive exceeds a certain threshold. The threshold varies depending on your relationship to the person giving you the gift or leaving you the inheritance.

• Group A: Spouses, civil partners, children (including adopted, foster, and stepchildren), and lineal descendants (such as grandchildren and great-grandchildren) have a threshold of €335,000.
• Group B: Brothers, sisters, nephews, nieces, and lineal ancestors (such as parents and grandparents) have a threshold of €32,500.
• Group C: Everyone else has a threshold of €16,250.

The inheritance tax rate in Ireland is 33% on all gifts and inheritances that exceed the relevant threshold. This means that if you receive a gift or inheritance worth more than the threshold, you'll need to pay 33% of the value of the gift or inheritance in tax.

There are a number of ways to avoid paying inheritance tax in Ireland, including:

• Giving gifts below the threshold: If you give gifts below the relevant threshold, your beneficiaries won't have to pay inheritance tax on them.
• Using trusts: Trusts can be used to pass on assets to beneficiaries in a tax-efficient way. However, trusts can be complex and expensive to set up and manage.
• Taking out life insurance: Life insurance can be used to provide your beneficiaries with a tax-free lump sum when you die. This can help them to pay any inheritance tax that they may be liable for.