What Is Capital Acquisitions Tax?
Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances received by an individual. It is charged on the market value of the benefit received above certain tax-free thresholds, which depend on the relationship between the giver and the recipient.
Updated for 2026 Revenue rates.
Group Thresholds (Tax-Free Amounts)
CAT exempts certain amounts based on the relationship between the disponer (the person giving the gift or inheritance) and the beneficiary:
- Group A (€400,000) — gifts/inheritances from a parent to a child. Also applies to a foster child who has been in the care of the disponer for at least 5 years
- Group B (€32,500) — gifts/inheritances from a lineal ancestor (grandparent, great-grandparent) to a lineal descendant (grandchild, great-grandchild). Also brothers, sisters, nieces, nephews, and children of a civil partner
- Group C (€16,250) — gifts/inheritances to any other person not covered by Group A or B
These thresholds are lifetime limits — they apply to the cumulative value of all gifts and inheritances received from people in the same Group.
CAT Rate
The rate of CAT is 33% on the value of gifts or inheritances exceeding the relevant group threshold.
Small Gift Exemption
Gifts of up to €3,000 per year from any one person are exempt from CAT. This exemption is per disponer, not per beneficiary, so you can receive multiple €3,000 gifts from different people each year without tax consequences.
Agricultural Relief
Agricultural property may qualify for a 90% reduction in its market value for CAT purposes, meaning only 10% of the value is subject to tax. Conditions include:
- The beneficiary must be a farmer (at least 50% of their net worth in agricultural assets after the inheritance)
- The property must be agricultural land, buildings, or stock
- The beneficiary must retain the property for at least 6 years
Business Relief
Similar to agricultural relief, business relief provides a 90% reduction in value for gifts/inheritances of business property. Conditions:
- The business must be a qualifying trade or profession
- Business assets may include shares in a family company, sole trader assets, or partnership interests
- The beneficiary must retain the assets for at least 6 years
Favourite-Niece/Nephew Relief
A niece or nephew who has worked substantially full-time in the disponer's family business for at least 5 years may qualify for the Group A threshold (€400,000) rather than the Group B threshold, making them eligible for the same tax-free amount as a child.
Dwelling House Exemption
A dwelling house inherited or received as a gift may be exempt from CAT if:
- The beneficiary lived with the disponer for at least 3 years prior to the gift/inheritance
- The beneficiary has no other dwelling house
- The beneficiary does not dispose of the house within 6 years
Filing and Payment
CAT returns must be filed and tax paid by 31 October of the year following the year the gift or inheritance is taken. Returns are filed through Revenue's online service. Late filing incurs interest and surcharges.
CAT in 2026: rates and thresholds
Capital Acquisitions Tax is charged at 33% on the value of gifts and inheritances above the group thresholds: Group A — €400,000 from a parent to a child (also applies to foster children cared for 5+ years); Group B — €32,500 from a grandparent, sibling, niece/nephew, or other lineal ancestor/descendant; Group C — €16,250 for everyone else. The thresholds are cumulative lifetime limits — every gift or inheritance from people in the same group adds up, and once you exceed the threshold, everything above it is taxed at 33%. The small gift exemption lets anyone give up to €3,000 a year to any person free of CAT — a married couple can together give €6,000 a year to each child tax-free.
When is the tax due?
CAT returns are due by 31 October of the year after the gift or inheritance (for example, a gift received in 2026 must be declared by 31 October 2027), and the tax is payable at the same time. Interest applies on late payment, and a surcharge applies to late returns. If you are unsure of the value — shares, property, business assets — get a professional valuation; under-declaring leads to interest, penalties and, in serious cases, prosecution. You can pay in instalments for certain assets (e.g., property and business assets) over 5 years.
Reliefs that reduce or eliminate CAT
The Dwelling House Exemption is the big one: a child who inherits the family home can be fully exempt if they lived there for 3+ years before the inheritance (no other property owned) and continue living there for 6 years after. Agricultural Relief and Business Relief reduce the taxable value of qualifying farms and business assets by 90%. Favourite-Nephew/Niece Relief can reduce the effective rate on a business inherited by a nephew/niece who worked in it for 5+ years. Spouses and civil partners are completely exempt from CAT on gifts and inheritances between them, and a dwelling house passing between cohabiting partners may also qualify in certain circumstances.
Action steps
- Track cumulative gifts from each disponer — the €3,000 annual small gift keeps most birthday gifts tax-free.
- If you inherit a home, check the Dwelling House Exemption conditions before assuming tax is due.
- Keep valuations and records for 6 years.
- If you are the giver, remember you can give €3,000 per person per year without using anyone's threshold.