Capital Acquisitions Tax An unusual feature of Irish capital acquisitions tax/gift/ inheritance tax is that it looks at the receipt by the donee/recipient rather than the giving by the donor/deceased. The relevant allowances are measured with reference to the donee. Accordingly, by making gifts to a wider class of persons, the overall inheritance tax liability is reduced. A gift arises […]
Calculation of Capital Acquisitions Tax Capital Acquisitions Tax, whether gift or inheritance tax, is paid on the taxable value of the gift or inheritance. The taxable value is the market value reduced by deductible costs, liabilities and expenses and by consideration paid in money or money’s worth. The incumbrance-free value is the market value on the valuation date less than […]
Overview Gift and inheritance tax is charged on the value of the gift or inheritance received. It is the price which those assets might reasonably be expected to obtain on a sale in the open market subject to such conditions as might be calculated to obtain for the seller the best price. The best price is generally understood to be […]
Significance The valuation date is the date on which the value of the property and assets is established. It determines which date the tax is payable and when the CAT returns are due to be filed. Where the valuation date is: between 1 January and 31 August, the pay and file deadline is 31 October in that year between 1 […]
Application for Representation An application for a grant of probate is made to either the central Probate Office or one of the district Probate Offices throughout the country. The Probate Office has the authority to issue grants of probate throughout Ireland. The Probate Offices are part of the High Court. In the vast majority of cases, the Will is proved […]
Nature A gift is a transfer of property gratuitously. It is usually contrasted with a bequest or legacy under a will in that the donor is still alive. In certain cases where the donor makes, transfers property in expectation of death, it is treated for tax and certain other purposes as given on death. A gift involves the intention of […]
Setting Aside a Gift The presumption is that gifts may not be revoked once given. A gift may be revocable by its terms. Gifts may be set aside if induced by fraud, mistake or misrepresentation or undue influence. There are many cases in Ireland over the years where gifts have been set aside when made by older, vulnerable persons in […]
Delivery and Goods A gift of goods is incomplete without delivery. Delivery is the mechanism by which goods are passed. Physical delivery may not be required if constructive delivery takes place. Where goods cannot be physically delivered because of their bulk, they maybe constructively delivered by means. Delivery of a key or equivalent. A part of a set may be […]
Companies A limited company did not have power to gratuitously transfer assets. There was a presumption that it did not have such power where it is incorporated for the purpose of a trading business which does not contemplate gift. There was a tendency to interpret objects and Memorandum of a company as being for commercial purposes towards the business. However, […]
Types of Grant The vast majority of grants of representation, whether by way of grant of probate, letters of administration or letters of administration with the will annexed are issued from the Probate Office. They issue in the name of the High Court, even though a court order or judgment is not usually required. See the separate section on contentious […]
Burdensome Gift Where a gift is made of property subject to a charge and there is no reference to the charge, then if the donor created the charge and is liable, the donee cannot be called to pay any part of it. If the donor took the property subject to the charge, whether or not he is liable to pay […]
Letters of Administration Letters of administration empower the appointed person to administer the estate of a person who has died without a valid or applicable will. For most purposes, the procedure and process are similar to that in the case of a will and grant of probate. The Succession Act defines the entitlements of the beneficiaries. The entitlement to letters […]
Administration with Will Annexed Where the will appoints no executor or an executor was appointed but has died, ceases to act or lacks mental capacity, is under a disability has left this country, has renounced or is not present, an application may be made for letters of administration with the will annexed. The terms of appointment of the executor may […]
Probate Officer The Probate Officer is a Court Officer who exercises quasi-judicial functions in relation to probate matters. In some more complex cases, orders of the Probate Officer are required. The Probate Officer may issue a grant in various atypical cases where a court order is not required. Some common cases are set out in other chapters and below. There […]
Gifts in Contemplation of Death Gifts in contemplation of death, a gift made in contemplation though not necessarily in immediate expectation of death in circumstances which show that it is to take effect only in the event of death are valid revocable gifts. They may be revocable in the event that the donor does not die or recover. Formerly, gifts […]
Free Use of Asset The free use of an asset is charged to give tax on its annual value. Where the person is allowed the free use of the assets, he is deemed to have the annual value if he, in fact, has the use of the asset without any entitlement to any interest in it. If he is, in […]
Basic Exemption The dwelling house exemption has existed for over twenty years. It has been subject to significant amendments. Since 2016, the exemption for lifetime gifts has been severely restricted. The conditions for exemption in the case of inheritances are that at the date of the inheritance: the house was the only or main home of the deceased disponer (this […]
Spousal Exemption There is a complete exemption for gifts or inheritances between spouses and civil partners. This has not always existed. When the CAT was first introduced, spouses were in the equivalent of Group A. As of 30th January 1985, all inheritances became exempted. As of 31st January 1990, all gifts became exempted. Transfers between former spouses after divorce, pursuant […]
Reliefs This chapter deals with miscellaneous reliefs from capital acquisitions tax. There are a number of CAT reliefs. A relief generally requires compliance with conditions and must be claimed. An exemption applies automatically once the relevant terms and conditions apply. See the separate chapter on exemptions. Other sections look in detail at two major reliefs, namely that applicable to agricultural property […]
Overview Since the introduction of capital acquisitions tax, a relatively generous agricultural property relief has been available. The primary purpose has been to alleviate the inheritance tax burden that might otherwise apply to the inheritance of a family farm. Agricultural relief gives a 90 percent reduction in the taxable value of the property/assets concerned. There is a 90 percent reduction […]