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Wills and estates

Capital acquisitions tax and the three thresholds.

If you inherit or are given something, you may owe capital acquisitions tax on the part above your threshold. Which threshold you get depends on your relationship to the person giving it. There are three, and the difference between them is large.

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Your relationship to the giver

Value of what you receive

€0€1,200,000

Earlier gifts or inheritances in the same group since 5 December 1991

€0€500,000

Benefits within the same group are added together over your lifetime. The threshold is used once, not once per gift.

What does the benefit mainly consist of?

The figures

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If 90% relief applies

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Agricultural relief and business relief cut the taxable value of qualifying property by 90%. The conditions are strict: an 80% asset test, active farming or a genuine trade, and a clawback if the property is sold or the activity stops within six years. Whether a family qualifies is often decided by arrangements made years in advance, which is why the early meeting matters.

A guide to the current thresholds only. Reliefs and exemptions can change the answer completely, including dwelling house relief, agricultural relief, business relief and transfers between spouses or civil partners, which are exempt. Thresholds are set in the Finance Act and have changed several times. Take advice on the actual benefit before you file.

Talk to us about a benefit

The three groups

Who falls into which group.

Group A

A child of the person giving, including a stepchild or an adopted child. A foster child in some cases, and a parent taking an inheritance from a child in certain circumstances.

Group B

A brother, a sister, a nephew, a niece, a grandchild, or a parent taking a gift. This is the group most often underestimated, because the threshold is much lower than people expect.

Group C

Everybody else. A cousin, an in law, a friend, a neighbour, a partner you are not married to or in a civil partnership with.

Planning is easier before the event than after it

Thresholds, reliefs and the order in which assets pass all interact. If you are making a will, or thinking about transferring a house or a farm, this is the conversation to have first.

Making a will Probate