Budget 2025 has made some long-awaited changes in the area of Capital Acquisitions Tax (CAT) (also known as Inheritance/Gift Tax) in Ireland. One of the major changes is the increase in the CAT tax free thresholds which determines the amount a person can inherit or receive as a gift before paying CAT at 33%.
The amount of inheritance/gifts a person can receive depends on their relationship to the person from whom they are receiving the inheritance/gift. The relationships are grouped into three categories with different tax-free limits.
Budget 2025 has increased the tax-free limits within the three groups where the date of the gift or the date of death in the case of inheritance is on or after the 2nd of October 2024. The increase to each of the three categories are as follows:
- Group A Threshold: gifts or inheritance from parent to child (including adopted children, foster children, and stepchildren)
Budget 2025 has increased the Group A threshold from €335,000.00 to €400,000.00 this means that a child can inherit or be gifted up to €400,000.00 from a parent without paying CAT.
- Group B Threshold: gifts or inheritance from blood relatives such as gift/inheritance from grandparent, aunt/uncle or sibling
Budget 2025 has increased the Group B threshold from €32,500.00 to €40,000.00.
- Group C Threshold: any relationship not in Group A or Group B
Budget 2025 has increased the Group C threshold from €16,250.00 to €20,000.00.
Any gift or inheritance received over the relevant group threshold will be subject to CAT at a rate of 33% (the rate has remained unchanged).
This is a long-awaited and welcomed change given the rise in property prices across Ireland.
Should you have any queries in relation to Will or Probate matters please do not hesitate to contact us on 01 2960666 or info@dillon.ie
