Inheritance Tax Ireland Calculator
Use our guide to calculate your inheritance tax liability.
Inheritance Tax Ireland Calculator
How is inheritance tax calculated in Ireland?
In Ireland, your inheritance tax liability will be calculated using the value of any assets left behind.
If you receive an inheritance following a death, there may be an inheritance tax liability. Should you receive a gift, there may be a gift tax liability.
There are certain thresholds that outline how much an individual can inherit tax-free.
Anything over these thresholds will be liable to Capital Acquisitions Tax (CAT).
Your relationship with the disponer determines your threshold. The disponer is the person giving the gift or asset.
The person receiving the gift or asset is the beneficiary.
Inheritance tax groups:
Capital Acquisitions Tax (CAT)
Capital Acquisitions Tax (CAT) is a charge on inheritances or gifts over a certain threshold. Whether it is personal wealth or accumulated through a business, there may be a tax liability when it is being inherited.
The current Capital Acquisitions Tax (CAT) rate is 33%.
In some cases, there may be reliefs available. A Capital Acquisitions Tax (CAT) liability may arise where:
- The disponer is an Irish resident
- The beneficiary is an Irish resident
- The gift or inheritance includes Irish property or land
Group | Relationship to disponer | Threshold as of 2022 |
A | Son/Daughter | €335,000 |
B | Parent/Brother/Niece/Nephew/Grandchild | €32,500 |
C | Relationships other than Group A or B | €16,250 |
How is inheritance paid in Ireland?
The responsibility to pay any inheritance tax liability lies with the person receiving the inheritance.
Revenue outlines the timelines on their website. Any tax liability for gifts or inheritance received must be settled within these timelines.
Date that gift or inheritance was received | Revenue expects payment by: |
1st January – 31st August | October 31st of the same year |
1st September – 31st December | August 31st of the following year |
You can pay your inheritance tax liability via debit or credit card online.
There is also an option of completing an IT38s form. This can then be sent directly to Revenue.
Is there a penalty for late Capital Acquisitions Tax (CAT) payments?
Yes. Any late payments may be subject to penalties and interest until the full amount is paid.
If you are late filing a payment but pay the tax bill by October 31st, there is a late fee.
Delay of 2 months or less | 5% (up to a maximum of €12,695) |
Any delay longer than 2 months | 10% (up to a maximum of €63,485) |
Late fees and penalties can be significant. Therefore, it is important to calculate and settle any inheritance tax liability as soon as possible.
As well to the above charges there is a daily interest charge. This is roughly 8% per year.
Any interest outstanding will be computed from October 1st each year.
How much Inheritance tax was paid in Ireland in 2021
As houses and estates in general increase in value, we are paying more in inheritance tax each year.
The reduction in inheritance tax thresholds has also contributed to this. Inheritance tax is no longer solely for those with extreme wealth.
In 2021, the Irish Government collected €522 million in inheritance tax.
This was from a Capital Acquisitions Tax (CAT) bill on €1.6 billion worth of assets.
There are estate planning strategies that can be put in place to combat such tax bills. Implementing a Section 72 policy is often the most common method.
Breakdown of Capital Acquisitions Tax (CAT) payments in Ireland - 2021
The below table breaks down how much Capital Acquisitions Tax (CAT) is collected from specific areas. We can also see there is a marked increase between 2020 and 2021.
Source | 2021 (€ million) | 2020 (€ million) |
Inheritance Tax | €480.93 | €430.58 |
Gift Tax | €94.88 | €71 |
Discretionary Trust Tax | €5.77 | €3.51 |
Probate Tax | €0.18 | €0.15 |
Total CAT | €582 million | €505 million |
Group | Inheritance Tax Collected (Millions) 2021 |
Group A (Son/Daughter) | €175 |
Group B (Niece/Nephew/Parent/Brother/Sister) | €234 |
Group C (Other) | €72 |
Total | €481million |
The table above highlights that those in Group A and B have the highest inheritance tax liabilities.
What is the inheritance tax rate in Ireland?
Inheritance tax thresholds
There are three different threshold groups. Each has a different maximum amount and your threshold will be dependent on your relationship with the disponer.
Date | Group A | Group B | Group C |
From October 9th 2019 | €335,000 | €32,500 | €16,250 |
Group A – Son or Daughter
The tax-free threshold for those under Group A is €335,000.
To qualify for this threshold the beneficiary must be one of the following:
- A child, step-child, or foster child.
- Minor child of a deceased child of the disponer.
- Parents also fall under this threshold where they take an inheritance of an absolute interest from a child. Otherwise, parents will fall under threshold B.
Group B – Parent/Brother/Niece/Nephew/Grandchild
The tax-free threshold for those under Group B is €32,500.
To qualify for this threshold the beneficiary must be one of the following:
- Brother or sister
- Niece or nephew
- Grandparent or grandchild
- Lineal ancestor or lineal descendant
Group C – Other
The tax-free threshold for those under Group C is €16,250.
This threshold will apply to all those who do not fall under Group A or B. This includes any cousins, great-nephews, great-nieces and all non-relatives of the disponer.
How do I calculate my inheritance tax liability?
| Date | Group A | Group B | Group C |
| From October 9th 2019 | €335,000 | €32,500 | €16,250 |
Calculations will be made automatically when you use Revenue’s online service to submit your tax return.
From here your liability will be calculated. The amount you will be liable to pay will depend on a combination of factors.
- The value of the asset(s) being passed
- Your relationship with the disponer (see threshold breakdown below)
- Whether you have received other gifts or inheritances within the same threshold previously.
A tax liability may be avoided if:
- The value of asset(s) being inherited is below the relevant threshold
A liability may also be avoided where reliefs apply. These include:
If you feel any of the above may be applicable, you can jump ahead as we break each down in further detail.
Inheritance Tax Calculation - Case Studies
Below we calculate the inheritance tax due in different scenarios. The most important factor is the relationship between the beneficiary and disponer.
This will determine their threshold and therefore the maximum they can inherit free of Capital Acquisitions Tax (CAT).
Group A – Son/Daughter
Example 1 – Joanne
Joanne received an inheritance from her father. Joanne did not receive any gifts or inheritance prior to this.
Cash | €45,000 |
Family Home | €525,000 |
Total Benefits Received | €570,000 |
Minus Threshold -Group A (Son/Daughter) | €335,000 |
Taxable Sum Due | €235,000 |
Capital Acquisitions Tax (CAT) Due | €77,550 |
Example 2 – Peter & Yvonne
Peter and Yvonne have received an inheritance from their parents. Neither has received any gifts or inheritance prior to this.
Cash | €65,000 |
Family Home | €885,000 |
Stocks/Shares (capital value) | €75,000 |
Total Benefits Received | €1,025,000 |
Minus Threshold -Group A (Son/Daughter) | €335,000 x 2 = €975,000 |
Taxable Sum Due | €235,000 |
Capital Acquisitions Tax (CAT) Due | €50,000 |
There are also what Revenue considers ‘normal payments’. These include:
- Use of the family home
- Educational costs and free accommodation for college
- “Reasonable” wedding contributions
This may fall outside the scope of any Capital Acquisitions (CAT) liability. CAT is a self-assessment tax. If you are unsure whether you may be required to submit an asset, please contact the Revenue Commissioners with the appropriate details.
Group B – Niece/Nephew/Siblings/Grandchildren
Example – Joseph
Joseph received an inheritance from his grandfather. Joseph did not receive any gifts or inheritance prior to this.
Cash | €5,000 |
Family Home | €300,000 |
Total Benefits Received | €305,000 |
Minus Threshold -Group B | €32,500 |
Taxable Sum Due | €272,500 |
Capital Acquisitions Tax (CAT) Due | €89,925 |
Group C – Other
Example – Alan
Alan received an inheritance from a friend of his who recently passed away. Alan had not received any gifts prior to this. His friend has no next-of-kin and decided to leave him home to Alan.
Family Home | €345,000 |
Total Benefits Received | €345,000 |
Minus Threshold -Group B | €16,250 |
Taxable Sum Due | €328,750 |
Capital Acquisitions Tax (CAT) Due | €108,487.50 |
Parent/Child Exemption
Any benefits passed from a living parent to a child are restricted. The benefits must be for support, maintenance, or education and during the period where the child is a minor or were in full-time education and is no older than 25 years of age.
Tax on property inherited
Inheritance tax liabilities apply to all property located in Ireland. It also included all property not located in Ireland but the person giving or receiving the benefit is a resident in Ireland for tax purposes.
Tax on property inherited outside of Ireland
In some cases, you may inherit a property located outside of Ireland. In this circumstance, you may be liable to pay inheritance tax in a different country.
The amount payable and rules surrounding the payment will be dependent on the legislation associated with that specific country.
Furthermore, there may be an agreement between Ireland and the country in question. You may be eligible for a Capital Acquisitions Tax (CAT) credit if you have paid tax on foreign property.
Property located in the United Kingdom and the United States may be eligible for relief.
What is the valuation date?
The valuation date is the date on which the market value of property comprising the inheritance is established.
The valuation date is not fixed and will be dependent on the circumstances of each specific case. Determining the valuation dates for gifts is relatively straightforward.
However, determining the valuation date of inheritance can be difficult.
For inheritance tax purposes, the beneficiary is the earliest of the following dates:
- The date on which the beneficiary is entitled to receive the inheritance from the disponer;
- The date on which the asset(s) are retained
- The date of the delivery of assets or payment to the beneficiary
Should an inheritance form part of the estate of a deceased person, the valuation date is usually the same date as the grant of probate. This will be the same date as the letters of administration where the disponer dies intestate.
What do you have to pay inheritance tax on?
Inheritance tax in the form of Capital Acquisitions Tax (CAT) must be paid on an asset inherited over a certain threshold.
Assets that fall into these categories include:
- Cash
- House or lands
- Household contents
- Paintings
- Jewellery
- Cars
- Stocks and shares
- Free use of property
- Interest-free loans
- A life interest or a right of residence in a property
- A benefit received out of a discretionary trust
- Any shares in jointly held property that you inherited from another joint owner
Revenue applies strict guidelines to all of the above. Their website outlines its rules and regulations in more detail.
Are there any inheritance tax exemptions
There are certain areas and situations where extensions and relief apply. Inheritance tax exemptions include:
- Any inheritance between a spouse or civil partner
- If assets are below the relevant threshold
- The first €3,000 of gifts from each disponer in a calendar year
- Gifts for charitable purposes
- Any normal or ‘reasonable’ payments received from family members for education
- Certain Life Insurance policies (Section 72)
- Dwelling house relief
- Business Relief
- Agricultural Relief
- Heritage Relief
Annual gift exemption
In most cases, a gift from one individual to another may trigger a Capital Acquisitions Tax (CAT) liability. However, in some cases there are exemptions.
Capital Acquisitions Tax (CAT) legislation allows for the first €3,000 of any gift by one individual to another per year.
There does not need to be a specific relationship between the disponer and the beneficiary. It is also allowable for an individual to receive gifts of up to €3,000 from various different people.
For example, each grandparent may decide to give both grandchildren €3,000 each per year over 18 years. This would result in a total tax-free amount of €54,000 per child.
This will not affect their inheritance tax thresholds. Although when gifting money to a child, it is important that it is clearly demonstrated that the child is the beneficiary.
Setting up a savings policy in their name is the best course of action.
Key note
The Annual Gift Exemption cannot be carried over or aggregated over a number of years.
Other inheritance tax reliefs
Within inheritance tax, there are reliefs available. It is important to be aware of such relief when calculating your potential inheritance tax liability.
Business Relief
If you inherit a business, you may qualify for business relief. Business Relief reduces the taxable value of the business by 90% for Capital Acquisitions Tax purposes.
Value of business being inherited | €1,000,000 |
Business Relief | 90% |
Potential Tax Liability | €900,000 |
New Tax Liability (Business Relief Granted) | €100,000 |
The relief does not apply to individual assets, even if those assets were used in the course of business.
The beneficiary must then retain the business for a minimum of six years. There are also other stipulations that must be adhered to. Otherwise, a clawback may be implemented.
Agricultural Relief
Agricultural Relief, if granted, can provide up to 90% relief on the inheritance of agricultural property.
However, the agricultural land and/or assets must be passed to a ‘farmer’. The definition of a farmer in these circumstances is specific.
A ‘farmer’ is an individual who can show that no less than 80% of their assets comprises of agricultural property.
An example is John, who inherits a farm worth €900,000 from his father. Below we calculate John’s eligibility for farm relief.
John recently bought a house for €280,000 with a €260,000 mortgage. His car is also worth €7,000.
John’s assets prior to his inheritance | |
House (minus mortgage) | €20,000 |
Car | €7,000 |
Total Assets | €27,000 |
Agricultural Assets | |
Farm | €900,000 |
Farm Machinery | €70,000 |
Livestock | €50,000 |
Total Agricultural Inheritance | 1,020,000 |
Combined assets = €1,047,000. Farmer test is Total Agricultural Inheritance/ Total Combined Assets x 100.
Heritage Relief
There are particular items that may be exempt from inheritance tax. Any object of national, scientific, or historical interest may qualify.
Other items include:
- Prints
- Books
- Manuscripts
- Jewellery
To qualify, Revenue outlines certain conditions that must be satisfied.
Favourite Niece/Nephew
In certain circumstances, Revenue allows a favourite niece or nephew to fall under the Group A threshold. However, this is subject to several conditions.
To qualify for the favourite niece or nephew relief you must be a child of the disponers:
- Sister
- Brother
- Sister’s civil partner
- Brother’s civil partner
Dwelling house exemption
Should you qualify under the dwelling house exemption, you may escape a Capital Acquisitions Tax (CAT) liability.
However, strict conditions apply. As of December,2016, you will be exempt if:
- The house was the main residence of the individual who had died.
- You have lived in the house as your only or main residence for the three years prior to the date of inheritance.
- You do not own, or have an interest in any other house.
- You remain living in the house for six years after the date of inheritance.
How to avoid inheritance tax legally
There are ways of reducing a potential inheritance tax liability. However, action must be taken while the future disponer is still alive.
Whether through a Life Insurance policy or succession planning, a plan is vital.
Although estate planning may have previously been seen as only for the super-wealthy, this is no longer the case.
For example, the value of property has skyrocketed in recent years. Without a plan in place, setting the affairs of an estate can be a time-consuming and costly process.
If you are looking to avoid and/or reduce your potential inheritance tax liabilities, below are some avenues to explore.
1) Increase the number of beneficiaries in your will
Each beneficiary will have their own threshold. Increasing the number of beneficiaries will allow you to divide the inheritance further and therefore reduce any potential tax bills.
2) Utilising the annual gift exemption
You may receive a gift up to the value of €3,000 from anyone in a calendar year without incurring a Captial Acquisitions Tax liability. Using this method over an extended period of time may be a sufficient way of passing on wealth.
3) Setting up a family partnership
Although it may likely only be an option in special circumstances, setting up a family partnership could be an option to be explored.
A family partnership is a structure where parents retain a degree of control over any investments or trading assets they wish to share with their children during their lifetime. The value of the partnership is dispersed between all partners involved.
Estate planning allows you to decide how you would like your assets to be distributed.
Section 72 - Life Insurance Policy
A Section 72 policy Is a Revenue approved, Whole of Life Insurance policy. It is taken out specifically to pay a Capital Acquisitions Tax (CAT) liability.
It can also cover a tax liability arising from a pension such as funds inherited through an Approved Retirement Fund (ARF).
A Section 72 policy is used by parents to pay their children’s inheritance tax bill. It works the same as any other Life Insurance policy. The policyholder pays the premiums and, on their death, the beneficiaries receive a lump sum.
In this case, the lump sum is used to pay the CAT liability.
We have a specific area of our website dedicated to Section 72 policies. This will provide you with in-depth information and important details.
Whole of Life Insurance
Another option when considering inheritance tax liabilities is a Whole of Life insurance policy.
In return for paying a set premium each month, you can leave a lump sum for your beneficiaries.
While choosing a Whole of Life policy, there are different options available. These include:
- Single Cover – This is a Whole of Life policy that will cover a single person only. When the policyholder dies, the benefit is paid.
- Joint Life, first death – This policy will cover two people but pays out on the death of the first person. Only one payment is made.
- Joint Life, second death – This policy also covers two people but a lump sum is paid out on the death of the second person. It is only one payment but that payment is on the second death.
- Dual cover – This consists of two policies. A benefit will be paid on the death of the first and second person.
If you are considering a Life Insurance policy to reduce a potential inheritance tax liability, you are welcome to contact our team.
How to make a Capital Acquisitions Tax payment
After calculating your inheritance tax liability. The next step is to arrange payment to Revenue.
If you are registered with Revenue’s Online Service (ROS), you can pay via:
- ROS Debit Instruction (RDI)
- Single Debit Instruction (SDI)
- Credit or Debit card
If you are not registered with ROS, you can sign in to your myAccount and follow the steps
There is also an option for non-residents to pay via electronic funds transfer (ETF).
How emero can help you put Life Insurance in place
At emero, we have experience and a proven track record of assisting clients in this situation. Estate planning is a specialised area of advice. Therefore, it is important you have an advisor who has assisted multiple clients in a similar situation.
It’s our job to ensure you pass on your assets in the most tax-efficient manner. If you have any questions or would like to know more, please contact our team.
You can call us on 01 584 4280 or email us at [email protected]
We look forward to hearing from you.
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Any assets over the value of the relevant threshold will be liable for Capital Acquisitions Tax (CAT) at 33%.
No. This rule does not apply in Ireland. It is a rule used in the United Kingdom. In Ireland, lifetime gifts are not ignored even if the donor survives for seven years after the gift.
Yes. Siblings fall under the Group B threshold. They will be liable to Capital Acquisitions Tax (CAT) for any assets inherited over €32,500.
Yes. The resident of the disponer will set the rules.
Yes. There is a Revenue-approved Life Insurance policy known as a Section 72 policy. We have a dedicated guide explaining how these policies work and when they may be an option.
