Capital Acquisitions Tax is divided into two aspects: the tax charged on gifts and the tax charged on an inheritance. An inheritance is taken on a death while a gift is taken inter vivos (from a living person). Inheritance tax is therefore the tax payable on the value of an inheritance received from a deceased person. Gift tax is the tax payable on the value of a gift taken from a living person.

The rate of Capital Acquisitions Tax has been increased to 25% in respect of gifts and inheritances taken after the 8th April 2009. The Inheritance Tax payable depends on the relationship between the donor (the person giving the property) and the donee (the person inheriting it). It also depends on prior benefits taken by the donee from any donors with whom the donee has the same relationship. Put simply, if you received property from your mother in 2003 as a gift and subsequently inherited property from your father in 2005, then you would have acquired property from two people with whom you had the same relationship, therefore the first gift from your mother would be taken into account when calculating the Tax payable on the inheritance from your father.

The Group Tax Free Thresholds from the 8th April 2009 are as follows:
Group A: Child/foster child/minor child of a deceased child €434,000.
Group B: Lineal ancestor or lineal descendant, for example Brother/sister/child of brother or sister €43,400.
Group C: All other relationships €21,700.

Therefore, you are allowed to receive gifts or inheritances from both your parents to the total combined value of €434,000 without having to pay Inheritance Tax.

It is imperative that one is fully advised of the full range of reliefs and exemptions from Capital Acquisitions Tax that may be availed of. Such reliefs and exemptions often act to significantly reduce or indeed nullify the payment of this tax.

Such reliefs/exemptions include but are not limited to:

• Surviving Spouse Relief
• Dwelling House Relief
• Business Relief
• Agricultural Relief

Here, at Pierse & Fitzgibbon Solicitors, our expert team has over forty years experience and will provide you with efficient and effective tax-planning advice.

For further information please contact:

Hugh Joyce (Solicitor)
t: 068 50918
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Mary Walsh (Solicitor)
t: 068 50928
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