How does Inheritance Tax (CAT) work?
In Ireland, when you die, your own home and any other assets are subject to Capital Acquisitions Tax (CAT). Above certain allowances, known as thresholds, a 33% tax is payable. These thresholds are set by government, can and do vary, and are based on your relationship with those whom you would like to benefit from your estate.
CAT, which is determined by Revenue, is due within 9 months of receiving a benefit-otherwise penalties apply.
Current Thresholds 2025
Group A:
€400,000
Parent to Child
Group B: €40,000
Siblings, Nieces/Nephews, Grandchildren
Group C: €20,000
Everyone else – close friends, unmarried partners, carers etc.
Example: Category A
Ann, a widow, leaves her family home to her son and daughter.
The home is valued at €500,000. Ann's son and daughter can each inherit up to €400,00 tax free. With the combined allowances of €800,000 exceeding the value of €500,000 no tax is due on the inheritance.
Example: Category B
Michael, who has no children, leaves his family home to his nephew and niece.
The home is valued at €500,000. His nephew and niece can each inherit €40,000 tax free. Tax is due on the balance of €320,00 at 33% and revenue claims €105,600.
Example: Category C
As an only child, Jack inherited his family home when his mother died in 2014. Jack's home, valued at €600,000 incurred a tax bill of €66,000 which he managed to pay from life savings. Now 72 years old, and without any immediate family, Jack plans to leave his home to a cousin, who is helping him with care and who does not own a home of her own. However with a threshold of €20,000, the tax liability for his cousin would be €191,400 - an amount she cannot afford.
Supporters of Inheritance Tax Say:
It helps redistribute wealth and fund public services. And that’s a valid goal.
Who’s Being Left Behind?
Inheritance tax can exist — but it must be fair.
No one should have to sell their family home just to pay a tax bill.
