FAQ's

CAT is a tax you pay when you receive a gift or an inheritance. CAT comprises two separate taxes – a Gift Tax payable on lifetime gifts and an Inheritance Tax payable on inheritances received on death. It is the person receiving the gift or inheritance who is liable to CAT and not the person or estate providing the benefit.

With effect from 1st December 1999, a charge to CAT will arise where either the disponer (the person giving the asset) or the beneficiary (the person receiving the asset) is resident or ordinarily resident in the State at the date of the Gift or Inheritance. Where both the disponer and the beneficiary are not resident or ordinarily resident in Ireland, a charge to tax would only arise in relation to Irish property.

Basically, anything of value that you leave to other people following your death (other than your spouse), will attract a tax due once it is outside of the threshold limits.

33% is the current (Correct as of Budget 2025) rate of tax on gifts or inheritances received by a beneficiary. It has been this rate since 2012. Source CAT Consolidation Act 2003 (as updated by subsequent Finance Acts).

For gifts and inheritances taken on or after 7 October 2026, the thresholds are Group A €420,000; Group B €44,000; Group C €22,000.

Group A generally applies to children inheriting from parents. Group B generally includes siblings, nieces, nephews and grandchildren. Group C covers other relationships. Special rules can apply, including some inheritances by parents and minor grandchildren.

Previous taxable benefits in the same group since 5 December 1991 reduce the remaining allowance. It is not a separate allowance for each parent. See Revenue’s group rules.

While tax is payable on all assets you receive, certain reliefs and exemptions apply to certain types of assets. The main reliefs are:

– Agricultural Relief – the value of farmland, buildings and stock can be reduced by 90% where the beneficiary is a qualifying farmer and holds the property for a minimum of 6 years.

– Business Relief – can provide a similar reduction of 90% in the value of certain businesses or private companies, where both the business and the beneficiary meet certain conditions.

– Family Home Exemption – exemption from Gift and Inheritance Tax is available on the value of certain “dwellings” with up to an acre of land where the disponer and the beneficiary meet certain conditions.

– Life Assurance Relief – the proceeds of life assurance plans, where the plan was effected specifically for the payment of Inheritance Tax or the tax payable on the value of an Approved Retirement Fund (ARF) inherited by a child over the age of 21, will not be subject to Inheritance Tax – provided the money is actually used to pay the relevant tax bills. This ‘Life Assurance Relief’ is commonly referred to as ‘Section 72 Relief’.

There are a number of both complex and simple ways for someone to reduce the amount of CAT that would be payable on the distribution of their estate following their death. Both are best explored by speaking with your accountant or solicitor that specialises in estate planning. There are other ways than having more children! For instance, the small gift exemption allows you to gift €3,000 very year to various relatives or individuals throughout your lifetime that will not form part of their lifetime threshold, hence reducing the value of your estate on death. This is of course, subject to you having sufficient cash to maintain your own lifestyle requirements in addition to these gifts. As is very common these days, people in the later stages of life are asset rich, but cash poor.

Anything that is left after whatever preparations you have made, will be subject to CAT payable by your beneficiaries. A final approach to take in preparation for this inevitability, is to take out a Section 72 policy to cover the amount due. This really does save on an awful lot of hassle following your death.

Yes you can, but the amount payable from this policy on your death will form part of your estate when it comes to calculating the CAT bill.

For instance – If the combined value of all of your assets – house, car, cash etc. – amounts to €1m and you also have a payout of €250k from a life assurance policy, then the value of your estate for CAT purposes is €1,250,000.

A Section 72 insurance policy is set up in such a way that it does NOT form part of your estate’s valuation for CAT purposes. In the scenario above, if your life assurance policy was set up as a Section 72 policy, then the valuation of your estate would remain at €1m and a separate fund of €250k cash to pay the CAT.

Your existing life assurance policy may also be a Term Assurance policy, which covers you only for a definitive amount of time – E.g. Cover may cease at age 80. With average life expectancy in Ireland being c. 82.5 years, your policy may not have the opportunity to pay out a benefit. A Section 72 policy is a Whole of Life policy – It will pay out the benefit irrespective of what age you die at.

Yes. The insured parent or parents generally own their Section 72 policy and pay the premiums. If the premiums become difficult to afford, adult children can help by making gifts to their parents.

Under Revenue’s Small Gift Exemption, each child can give up to €3,000 to each parent per calendar year (€6,000 across two parents). This limit includes any other gifts the child gives that parent in the same year. The parents can use the gifted money to pay the insurer from their own bank account.

Document the purpose of the gifts and how the premiums will be paid from the outset. Speak with Brian Whelan, QFA, before setting up the arrangement or changing how you fund an existing policy, so he can help you check that it meets Revenue’s Section 72 requirements.

No. They don’t. The only life assurance companies in Ireland to offer true Section 72 policies that can be legitimately & efficiently used for the payment of inheritance taxes are Irish Life, Royal London & Zurich. As we hold agency agreements with each of these companies, our job is to find you the most suitable policy, at the best price, to suit your needs.

Yes. Everything you own and pass on to someone else, is subject to taxation. The tax is applied to the beneficiary of the asset, so the amount payable will depend on the relationship of the beneficiary to the person leaving the asset (the disponer), and the tax free category that they fall into.

There can be an exemption for a child who has lived in the family home for three years leading up to the date of the inheritance. The property can be gifted to them tax free, but there are conditions attached.

The child (the beneficiary) must not own any other property and the beneficiary must stay in the property for six years after they take ownership, and they are not allowed to own any other property during that term.

Yes – that is the exact purpose behind effecting a Section 72 insurance policy. Its’ sole purpose is to provide a lump sum, on death of the insured person, which must be used to pay any inheritance taxes due by the beneficiaries.

The tax is inevitable to some degree, but how it is paid for can be managed and prepared for in advance.

No. Whatever your premium is when your policy starts, is the premium that you will pay for the duration of your policy. It will never change. If you include the Indexation option with your policy, your benefit amount will increase every year and this increase in cover will also result in an increase in premium.

These are ten terms you may see when arranging Section 72 cover or reading about inheritance tax in Ireland.

• Disponer — The person who gives a gift or leaves an inheritance.
• Beneficiary — The person who receives a gift or inheritance. In a policy trust, it means someone who can benefit under that trust.
• Policy owner — The person or people who legally hold the policy. If it is held in trust, the trustees hold it in that capacity.
• Life assured — The person whose life is insured. A policy may cover one life or two.
• Settlor — The person who creates the trust.
• Trust form (trust deed) — The document that sets out who holds the policy, who can benefit and how the trustees must act.
• Trustee — A person responsible for holding and dealing with the policy or its proceeds under the terms of the trust.
• Appointor (or appointer) — The person given the power to appoint trustees in the circumstances set out in the trust deed.
• Capital Acquisitions Tax (CAT) — Ireland’s tax on gifts and inheritances.
• Relevant tax — The tax that qualifies to be paid from the proceeds under Section 72. The relief applies to qualifying proceeds used for that purpose.

The names and powers on a trust form can vary by insurer and deed.