Inheritance tax in Ireland (CAT): thresholds, rates and filing
Ireland does not have an estate duty charged on the whole estate of the person who died. Instead, each person who receives a gift or an inheritance may have to pay Capital Acquisitions Tax (CAT) on what they personally receive. The tax is governed by the Capital Acquisitions Tax Consolidation Act 2003, amended almost every year by the Finance Act, and it is collected by Revenue.
Whether you pay anything depends on three things: your relationship to the person who gave or left you the property (which decides your tax-free group threshold), the total value of gifts and inheritances you have already received within the same group since 5 December 1991, and whether an exemption or relief applies. Above the threshold, CAT is charged at 33%. Spouses and civil partners pay nothing on what they receive from each other.
This guide is for beneficiaries of a will or an intestacy, people receiving lifetime gifts, and executors who need to understand what the beneficiaries will owe. It explains how to identify your group, how to value what you receive, which reliefs are worth checking (the dwelling house exemption, agricultural relief and business relief), and how to file Form IT38 and pay under the pay-and-file system by 31 October. The result should be a correct return filed on time, without surcharges or interest.
Key facts
Deadline
If the valuation date of your gift or inheritance falls between 1 January and 31 August, you must file Form IT38 and pay any CAT by 31 October of the same year; if it falls between 1 September and 31 December, the deadline is 31 October of the following year. Late returns carry a surcharge of 5% or 10% of the tax and daily interest on late payment.
What to do
- Work out which group threshold applies to you. The Group A threshold (currently €400,000) applies to a child of the person giving or leaving the property, including a stepchild, an adopted child and, in some cases, a foster child, and to a minor child of a deceased child. Group B (currently €40,000) covers parents, brothers, sisters, nephews, nieces and grandchildren. Group C (currently €20,000) covers everyone else, including cohabitants and friends. These figures were set by section 99 of the Finance Act 2024 for gifts and inheritances taken on or after 2 October 2024, and the Finance Act 2025 did not change them. Budget announcements can change thresholds from budget day, so check the current figure on revenue.ie before filing.
- Check whether you are fully exempt. An inheritance or gift from your spouse or civil partner is exempt and does not use any part of your threshold (sections 70 and 71 of the 2003 Act). A parent who inherits absolutely from a child is exempt if the child had received the property from that parent as a gift within the previous five years. Gifts of up to €3,000 per donor per calendar year are exempt under the small gift exemption in section 69. Lifetime gifts and inheritances from a parent are treated alike: both count against the same €400,000 Group A threshold.
- Add up your earlier gifts and inheritances. CAT is calculated on a lifetime basis within each group. Every gift and inheritance you received from anyone in the same group since 5 December 1991 is aggregated with the new benefit. If your parents each left you property, both inheritances count against the one Group A threshold. Make a list of previous benefits, their dates and their taxable values; Revenue will compare your figures with earlier returns. Gifts covered by the €3,000 small gift exemption are left out of the aggregation.
- Establish the valuation date and the market value. For an inheritance, the valuation date is normally the earliest of the date the executor can retain the property for you, the date it is actually paid or transferred to you, or the date it is retained for your benefit; in practice it is often close to the date the grant of probate issues. For a gift, it is the date of the gift. Value property at open market value on that date: obtain a written valuation from a qualified valuer for land and houses, and statements for bank accounts, shares and pensions. Deduct your share of the debts, funeral expenses and costs of administration.
- Check the dwelling house exemption under section 86. An inheritance of a house can be exempt where you lived in it as your only or main residence for the three years before the death, the house was also the deceased's home, you do not own or have an interest in any other residential property when you take the inheritance, and you continue to live in it for six years afterwards (this last condition does not apply if you are 65 or over). Selling the house within six years triggers a clawback unless the proceeds go into a replacement home. Gifts of a house qualify only in limited cases involving dependent relatives.
- Consider agricultural relief or business relief. Agricultural relief reduces the market value of agricultural property by 90% if, after taking the inheritance, at least 80% of your assets are agricultural and you farm the land, or lease it to an active farmer, for six years. Business relief gives the same 90% reduction for relevant business property held for the minimum period. The Finance Act 2025 tightened the rules on excepted assets for business relief for gifts and inheritances taken on or after 1 January 2026. Both reliefs are clawed back if the property is sold or stops qualifying within six years, so take advice before selling.
- Calculate the tax. Deduct the unused part of your group threshold from the taxable value; CAT at 33% is charged on the balance. Example: you inherit €520,000 from your mother and have received nothing before from Group A. The taxable excess is €120,000 and the tax is €39,600. If a niece or nephew worked full-time for at least five years in the deceased's farm or business, the favourite niece or nephew relief may treat those business assets as falling within Group A. Keep your workings; Revenue may ask for them in a compliance check.
- File Form IT38 online and pay. You must file a return if the total of your taxable benefits within a group exceeds 80% of the threshold, even if no tax is due. File Form IT38 through myAccount or ROS and pay at the same time. Executors also have a reporting duty: before a grant issues they must file the Statement of Affairs (Probate), Form SA.2, with Revenue, which lists the estate and every beneficiary. Revenue uses that form to check that beneficiaries file their own IT38.
- Keep records and deal with Revenue queries. Keep valuations, the will, the grant, the SA.2 and your IT38 calculations for at least six years. If you discover an error, file an amended return and pay the difference with interest; a qualifying disclosure reduces penalties. If you disagree with a Revenue assessment, you may appeal to the Tax Appeals Commission within 30 days of the notice of assessment. A beneficiary is personally liable for the tax, and the executor can be required to retain funds until it is paid.
What to watch out for
- Treating the threshold as applying to the whole estate. CAT is calculated on each beneficiary separately, so a large estate shared among several children may produce no tax, while a modest inheritance by a nephew or a friend can be taxable.
- Forgetting earlier gifts. Help from parents with a house deposit or a transfer of a site is a gift that uses part of the Group A threshold unless the €3,000 small gift exemption covered it. Omitting it leads to underpaid tax, interest and penalties.
- Assuming the dwelling house exemption applies because you lived in the house. You must not own another residential property and must keep living there for six years; renting it out or selling it early leads to a clawback.
- Missing the 31 October deadline because the grant took a long time. The valuation date can fall earlier than you expect, and the pay-and-file deadline runs from that date, not from the day the money reaches you.
- Selling inherited farmland within six years without checking the agricultural relief clawback. The relief can be withdrawn in full or in part, leaving a tax bill on a value that was reduced by 90%.
- Using an online calculator with out-of-date thresholds. Thresholds changed on 2 October 2024 and may change again with each budget; always check the figures that apply to your valuation date.
- Cohabitants are Group C. A partner who was not married to or in a civil partnership with the deceased has only a €20,000 threshold, which often comes as a shock when a home is left to them.
Legal basis
Frequently asked questions
How much is inheritance tax in Ireland?
Capital Acquisitions Tax is charged at 33% on the value of what you receive above your group threshold. Children of the deceased currently have a lifetime tax-free threshold of €400,000, close relatives such as siblings, nephews, nieces and grandchildren €40,000, and everyone else €20,000. Spouses and civil partners pay no CAT on what they receive from each other.
Do I pay inheritance tax on my parents' house?
Only if the value of the house, added to everything else you have received from your parents since 5 December 1991, exceeds the Group A threshold of €400,000. If you lived in the house with the parent for three years before the death and own no other home, the dwelling house exemption may remove the tax altogether, provided you keep living there for six years.
Is the threshold per parent or per child?
The threshold is per child and per group, not per parent. An inheritance from your mother and a later one from your father both count against the same Group A threshold of €400,000. Each of your siblings has their own separate threshold.
Who has to file the IT38 – me or the executor?
The beneficiary files Form IT38 and pays the tax. The executor files the Statement of Affairs (Probate), Form SA.2, before the grant issues, but that does not cover the beneficiaries' own CAT. An executor can, however, withhold part of an inheritance until the beneficiary's CAT has been paid.
When do I have to pay inheritance tax?
Under pay-and-file, if the valuation date is between 1 January and 31 August, you file and pay by 31 October of the same year. If it is between 1 September and 31 December, you have until 31 October of the following year. ROS users may get a slightly later date in some years.
How much can my parents give me tax-free each year?
Each person can give you up to €3,000 in a calendar year without any tax and without it counting towards your threshold. Both parents together can therefore give €6,000 a year, and a couple can give the same amount to your spouse. Larger gifts use part of your lifetime threshold.
Do I pay tax on money left to me by my partner if we were not married?
Yes, unless you were married or in a civil partnership. A cohabitant is in Group C with a €20,000 threshold. A cohabitant may, however, qualify for the dwelling house exemption on a shared home if all its conditions are met, which can make a large difference.
Does inheritance tax apply if I live outside Ireland?
CAT applies if the person who died was resident or ordinarily resident in Ireland, if you are resident or ordinarily resident here, or if the property is Irish property such as land in Ireland. Non-domiciled persons are treated differently in some cases. A double taxation agreement exists with the United Kingdom and the United States.
Can the threshold change after I inherit?
The threshold that applies is the one in force on the date of the gift or inheritance. A budget increase after that date does not reduce the tax on an earlier benefit, although it will apply to later benefits in the same group.
What happens if I do not file?
Revenue receives the executor's SA.2, so it knows who the beneficiaries are. Late filing results in a surcharge of 5% (up to two months late) or 10% of the tax, and interest is charged daily on late payment. Penalties may also apply if a return is incorrect.
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