Irish Inheritance Tax 2026 — CAT Capital Acquisitions Tax

TL;DR — Five Key Numbers

• Spouse / civil partner exemption: 100% — fully exempt under section 70 CATCA 2003.
• Group A threshold (child / minor grandchild of deceased child): €400,000 lifetime tax-free.
• Top rate: 33% flat Capital Acquisitions Tax on inheritances above the applicable group threshold.
• Lifetime aggregation: thresholds are lifetime cumulative across all gifts and inheritances within each group since 5 December 1991.
• Filing deadline: 31 October in the year following the valuation date (pay-and-file system).

Irish inheritance tax is Capital Acquisitions Tax (CAT), administered by Revenue (Revenue Commissioners) under the Capital Acquisitions Tax Consolidation Act 2003 (CATCA 2003). Spouses and civil partners are fully exempt. All other beneficiaries pay 33% on the amount by which their lifetime cumulative receipts from the relevant Group exceed the Group threshold.

Legal Framework

The governing statute is the Capital Acquisitions Tax Consolidation Act 2003 (CATCA 2003), which consolidated the 1976 Capital Acquisitions Tax Act and subsequent amendments. The latest material updates appear in the annual Finance Act, with the 2024 Budget raising Group A from €335,000 to €400,000 (effective from 2 October 2024) — a major increase reflecting Irish residential property price growth.

The tax authority is the Revenue Commissioners. Ireland taxes the beneficiary (heir or donee), not the estate — Capital Acquisitions Tax bundles inheritance tax, gift tax and discretionary trust tax into a unified framework. Each beneficiary calculates their own CAT liability based on the lifetime cumulative value of all gifts and inheritances received within each of the three Groups since 5 December 1991.

Residency anchoring: CAT applies if either:

• The disponer (donor / deceased) was Irish-resident or ordinarily resident at the date of the disposition, OR
• The beneficiary is Irish-resident or ordinarily resident at the date of the gift or inheritance, OR
• The property is situated in Ireland.

This is one of the broadest CAT residency anchors in the EU and pulls Irish-resident heirs of foreign estates into the Irish net.

Heir Classes Table (2026)

CAT uses three Groups, each with its own lifetime threshold. The same 33% rate applies above threshold across all Groups.

Note: a parent inheriting from a child (rather than the other way round) qualifies for Group A treatment under specific circumstances (s. 79 CATCA 2003 — full exemption where the inheritance is taken on the death of a child).

Group A's 2024 increase from €335,000 to €400,000 (the third bump in 5 years) reflects Irish property price pressure and is among the most generous direct-line lifetime thresholds in Europe by purchasing-power terms.

Allowances and Specific Reliefs

Small gift exemption: €3,000 per donor per donee per year — does not aggregate against the lifetime Group threshold. A child can receive €3,000 from each parent every year (€6,000 per year per child) without using any Group A threshold.

Annual aggregation: all gifts and inheritances from any disponer within the same Group aggregate against the single lifetime threshold for that Group since 5 December 1991. So a child who received €100,000 from their mother in 2010 and €200,000 from their father in 2026 has used €300,000 of the €400,000 Group A threshold cumulatively — the next €100,000 received from either parent (or any other Group A disponer) is still tax-free.

Dwelling-house exemption (s. 86 CATCA 2003): if the beneficiary has lived in the inherited dwelling as their only or main residence for the 3 years immediately before the inheritance and continues to live in it for 6 years after, the dwelling is fully exempt from CAT. The beneficiary must own no other dwelling at the date of inheritance. Strict — but powerful for adult children who have remained in the family home.

Agricultural relief (s. 89 CATCA 2003): qualifying farmer beneficiaries receive a 90% reduction in the taxable value of agricultural property (land, farm buildings, livestock, machinery). Test: at least 80% of the beneficiary's gross property must consist of agricultural property after the inheritance ("80% test"), or the beneficiary holds a relevant agricultural qualification and farms the land for at least 6 years.

Business relief (s. 92 CATCA 2003): qualifying business property receives a 90% reduction in taxable value. Conditions: the property must have been owned by the disponer for the requisite minimum period (5 years for gifts, 2 years for inheritances), and the beneficiary must hold the property for 6 years after.

Favourite nephew / niece relief (s. 27 CATCA 2003): a nephew or niece who worked substantially full-time in the disponer's trade or business for the 5 years before the gift/inheritance can elect to be treated as a Group A beneficiary in respect of that business — moving their threshold from €40,000 to €400,000.

Surviving spouse threshold succession (s. 70 spousal exemption): beyond the full s. 70 exemption between spouses, the surviving spouse can inherit from the predeceasing spouse's family with full Group A treatment in respect of that family — a relief sometimes overlooked in blended families.

Rates

Ireland uses a single flat rate:

The rate has been 33% since the 2013 Finance Act and is one of the higher inheritance flat rates in the EU. Combined with the modest Group B and C thresholds, this produces sharp jumps for non-direct heirs.

Filing Process and Deadlines

Ireland uses a pay-and-file system administered through Revenue Online Service (ROS):

• Valuation date: for inheritances, typically the date of grant of probate (administered estate) or the date of death (where no grant required).
• Filing form: Form IT38 (CAT return).
• Filing and payment deadline: 31 October in the year following the valuation date — provided the valuation date falls between 1 January and 31 August. For valuation dates between 1 September and 31 December, the deadline extends to 31 October of the next year (i.e., 14–22 months after death depending on probate timing).
• Surcharge for late filing: 5% of CAT due if up to 2 months late (capped at €12,695); 10% if more than 2 months late (capped at €63,485).
• Interest: statutory rate of approximately 0.0219% per day (around 8% annualised) from the original deadline.

Mandatory filing thresholds: even where no tax is due, an IT38 must be filed if cumulative Group receipts exceed 80% of the relevant Group threshold (e.g., €320,000 cumulative in Group A triggers a mandatory return).

Payment instalments: Revenue may grant up to 5 years of instalments for CAT on land, including agricultural and dwelling property, on application. Interest applies at the standard rate.

Specific Reliefs

Dwelling-house exemption (s. 86): described above — full CAT exemption for adult children living in the family home for 3 years prior and 6 years after inheritance, provided they own no other dwelling at the inheritance date. A central planning lever in modern Ireland given property prices.

Agricultural relief (s. 89): 90% reduction for qualifying farmer beneficiaries, subject to the 80% asset test or active farming qualification.

Business relief (s. 92): 90% reduction for qualifying business property, with 5-year (gift) / 2-year (inheritance) prior ownership and 6-year post holding requirements.

Charitable bequests: transfers to qualifying charities are exempt from CAT under s. 76 CATCA 2003.

Life insurance written in trust: Section 72 (and Section 73 for gifts) policies — life policies specifically taken out to fund CAT liabilities and held under qualifying trusts pay out outside the beneficiary's CAT base when used to pay CAT on the estate. A planning lever specifically encouraged by Irish legislation since 1985.

Pension Approved Retirement Funds (ARFs): on death, an ARF passing to a spouse is tax-free; passing to a child under 21 is tax-free; passing to a child over 21 is taxed at a flat 30% income tax (not CAT). ARFs passing to other beneficiaries are subject to income tax at marginal rates in the estate's hands and then CAT on the residual.

Gifts within 2 years of death: unlike Germany's 10-year rule or Belgium's 3-year reintegration, Ireland does not have a general clawback of recent gifts into the inheritance — instead, all gifts since 1991 are aggregated by Group, so the lifetime clock runs always.

Worked Example: €500,000 Estate to Spouse and Two Children

An Irish resident dies in 2026 leaving a net estate of €500,000: a Dublin family home (market value €420,000) plus €80,000 in deposits and pension residue. The will distributes equally.

Spouse share (€166,667):

• Spousal exemption under s. 70 → fully exempt.
• CAT due: €0.

Each child share (€166,667):

• Lifetime Group A threshold: €400,000, assumed unused.
• Inheritance €166,667 is within the threshold → CAT due: €0.
• IT38 filing nonetheless required if cumulative receipts reach 80% of threshold (€320,000) — not yet, so no filing in this scenario.

Total CAT on this estate: €0. The Group A threshold of €400,000 keeps middle-class Irish family inheritances entirely outside the CAT net in a single-event scenario.

Now extend to a larger Dublin estate of €1,500,000 left equally to a spouse and three children:

• Spouse share €500,000 → fully exempt.
• Each child share €333,333 → within Group A €400,000 → CAT €0 if no prior Group A receipts.
• Total CAT: still €0.

If instead the same €1.5m estate is split between two nephews and a niece (Group B, threshold €40,000):

• Each share €500,000.
• Taxable portion per nephew/niece: €500,000 − €40,000 = €460,000.
• CAT per beneficiary: 33% × €460,000 = €151,800.
• Total CAT: €455,400 on a €1.5m estate — a 30% effective rate when concentrated in Group B.

The Group A vs Group B gap is one of the steepest non-direct-line cliffs in the EU and is the main driver of Irish CAT planning.

Cross-Border Angle

Deceased resident abroad with Irish assets. A non-resident deceased's Irish-situated assets (Irish real estate, Irish bank accounts, Irish company shares) attract CAT in the hands of the beneficiary, regardless of beneficiary residency. The thresholds and rates apply normally.

Irish-resident heir of foreign deceased. CAT applies to worldwide assets if the heir is Irish-resident or ordinarily resident — even if the disponer was non-resident and the assets were located entirely outside Ireland. This is a wider net than most EU jurisdictions and surprises many returning emigrants.

Foreign tax credit: Ireland's s. 107 CATCA 2003 (and bilateral treaties) provides relief for foreign inheritance tax paid on assets situated abroad. The credit is the lesser of foreign tax paid or Irish CAT attributable to those assets.

Double-tax treaties on inheritance: Ireland has inheritance-tax treaties with the United Kingdom (1977) and the United States (1949 with 1951 protocol). The UK treaty is particularly active given heavy cross-border family ties. No EU-wide bilateral exists; coordination with continental EU jurisdictions relies on unilateral s. 107 credit.

Trusts and discretionary trusts: Ireland charges a one-off 6% discretionary trust tax on the value of property settled into a discretionary trust where the disponer dies, plus an annual 1% charge. These rules prevent indefinite tax deferral via trust structures.

Polish Reader Angle

A Polish heir of an Irish-resident deceased should map the layered analysis carefully:

1. EU Regulation 650/2012 (Brussels IV) — Ireland opted out of Brussels IV. Succession law for an Irish-resident deceased generally follows Irish private international law (predominantly law of domicile for movables, lex situs for immovables). A Polish heir cannot rely on the standard Brussels IV nationality-law election when the deceased was Irish-resident.
2. Irish CAT: applies to the Polish heir on worldwide assets of the Irish-resident deceased if the heir is Irish-resident, or only on Irish-situated assets if the heir is non-resident. A Polish-resident heir of an Irish parent inheriting only Irish assets pays CAT under standard Group A rules (€400,000 threshold).
3. Polish tax (podatek od spadków i darowizn): applies to the Polish-resident heir on the worldwide inheritance. Group 0 (spouse, descendants, ascendants, siblings) is exempt if SD-Z2 is filed within 6 months of acceptance.

For a Polish child of an Irish parent inheriting €350,000 of Irish assets:

• Ireland: within Group A €400,000 threshold → CAT €0.
• Poland: Group 0 with timely SD-Z2 → PL inheritance tax €0.
• Net liability: €0.

For a Polish nephew of an Irish aunt inheriting €100,000:

• Ireland: Group B threshold €40,000 → taxable €60,000 × 33% = CAT €19,800.
• Poland: Group III → after free amount roughly PLN 5,733, tax on the balance at 7–20% progressive. Polish unilateral relief credits the Irish CAT against Polish liability up to the lower of the two; Polish tax often resolves to €0 net after credit.

The practical sequence: file Form IT38 in Ireland by the relevant 31 October deadline; obtain the CAT assessment / acknowledgment; file SD-Z2 (Group 0) or SD-3 (other) in Poland within 6 months of acceptance, attaching the Irish documentation as foreign tax evidence.

Estate & net worth planning sidebar: Irish CAT's lifetime cumulative aggregation since 1991 — gifts and inheritances combined per Group — makes consolidated lifetime-receipt tracking essential. Freenance's Financial Freedom Runway lets you log lifetime gifts and project future inheritances against each Group threshold, showing how close you are to triggering CAT and what an inheritance event would do to your financial-independence timeline. Particularly useful for Polish-Irish families and adult children planning around the dwelling-house exemption.

FAQ

What is the current Group A threshold and when did it change? The Group A threshold is €400,000 as of 2026, raised from €335,000 in the 2024 Budget (effective 2 October 2024). Group B remained at €40,000 and Group C at €20,000.

Does the spouse really pay no CAT? Yes — section 70 CATCA 2003 fully exempts inheritances and gifts between spouses and civil partners. Cohabiting partners without civil partnership fall into Group C with a €20,000 threshold and 33% above.

How does the dwelling-house exemption work? Under section 86 CATCA 2003, an inherited dwelling is fully CAT-exempt if the beneficiary (a) lived in the dwelling as their only or main residence for the 3 years before the inheritance, (b) continues to live in it for 6 years after, and (c) owns no other dwelling at the date of inheritance. Strict but extremely valuable for adult children remaining in the family home.

Are gifts and inheritances cumulated for the threshold? Yes — all gifts and inheritances within the same Group from any disponer aggregate against a single lifetime threshold since 5 December 1991. A child who received €200,000 by gift from a parent in 2015 has €200,000 of Group A threshold left for any subsequent gifts or inheritances from any Group A disponer.

What is the small gift exemption? €3,000 per donor per donee per year, separate from the lifetime Group threshold. Two parents can each give a child €3,000 per year (€6,000 total) for life without using any Group A threshold — a long-term wealth transfer lever.

Can a Polish heir avoid double Irish-Polish inheritance taxation? There is no Irish-Polish bilateral inheritance treaty. Unilateral relief in both countries (Ireland s. 107 CATCA 2003; Polish foreign tax credit) generally eliminates double taxation in practice, though specialist advice is essential for higher-value or Group B/C inheritances.

What if I inherit Irish property but live in Poland? You owe Irish CAT on the Irish-situated property as a non-resident beneficiary of an Irish-resident disponer. You then owe Polish tax on the worldwide inheritance (subject to Group 0 exemption with SD-Z2). Foreign tax credit in Poland typically eliminates most of the Polish liability where Irish CAT was paid.

Informational content, not legal/tax advice. Inheritance law is complex — consult a notary or tax advisor.

Sources

• Revenue Commissioners — Capital Acquisitions Tax (CAT) guidance and IT38 forms
• Capital Acquisitions Tax Consolidation Act 2003 (CATCA 2003), as amended
• Finance Act 2024 — Group A threshold increase to €400,000
• Law Society of Ireland — succession practice publications
• Probate Office of the High Court — grant of probate procedure