CITIZENS INFORMATION: Everything you need to know about inheritance tax

Question: I have recently inherited some money following the death of a close relative. Will I have to pay tax on it?

Answer: If you get an inheritance following a death, you may have to pay inheritance tax on it.

Inheritance tax is a type of Capital Acquisitions Tax (CAT) which includes gift tax. You do not have to pay tax on gifts or inheritances from your spouse or civil partner.

If you get an inheritance from other relatives, you may get all or part of the inheritance tax-free — depending on the amount. The tax-free amount or threshold depends on the relationship between you and the person who left you the money.

Group A applies where you are the child, stepchild or adopted child of the person giving the gift or inheritance. In certain circumstances it can apply to a foster child or parent getting an inheritance.

Group B applies where you are the parent, grandparent, grandchild, great-grandchild, brother, sister, nephew or niece of the giver.

Group C applies to any relationship not included in Group A or B.

Since 10 October 2018, the CAT threshold for each group is as follows: 

Group A – €320,000 

Group B – €32,500 

Group C – €16,250 

You have to pay inheritance tax if the value of your inheritance (together with any other gifts and inheritances you have already received within the same group since 5 December 1991) is more than the tax-free amount or CAT threshold.

 If you do have to pay inheritance tax, it is charged at 33%. The tax only applies to the amount over the group threshold.

 As CAT is a self-assessment tax, you have to file a tax return. You can file Form IT38 (Inheritance Tax/Gift Tax Return) online through ROS, Revenue’s online service. You can also submit a paper form to Revenue.