Indexed Thresholds for Capital Acquisitions Tax

For the purpose of Gift and Inheritance Tax, the relationship between the person who provided the gift or inheritance (i.e. the Disponer) and the person who received the gift or inheritance (i.e. the beneficiary), determines the maximum tax free threshold – known as the “group threshold”.

Historically group thresholds were indexed by reference to the Consumer Price Index.

Section 109 Finance Act 2012 amends Schedule 2 of the Capital Acquisitions Tax Consolidation Act 2003. The amendment reduces the Group A tax-free threshold from €332,084 to €250,000 and rounds up the Group B and C tax-free thresholds from €33,204 and €16,602 to €33,500 and €16,750 respectively and abolishes the indexation of the tax-free group thresholds. The amendment applies to gifts and inheritances taken on or after 7 December 2011.

Under the Finance Act 2011 the indexation factor for 2010, will continue to apply to gifts and inheritances taken on or after 8 December 2010 to 6 December 2012. The indexation factor for 2010 (1 January 2009 to 31 December 2009 inclusive) was 1.361.

Indexed group thresholds
Group Relationship to Disponer Group Threshold from 8/4/2009 to 31/12/2009 Group Threshold from 1/1/2010 to 7/12/2010 Group Threshold from 8/12/2010 to 31/12/2010 Group Threshold from 1/1/2011 to 6/12/2011 Group Threshold from 7/12/2011
A Son/Daughter €434,000 €414,799 €332,084 €332,084 €250,000
B Parent*/Brother/Sister/
Niece/Nephew/Grandchild
€43,400 €41,481 €33,208 €33,208 €33,500
C Relationship other than Group A or B €21,700 €20,740 €16,604 €16,604 €16,750

*In certain circumstances a parent taking an inheritance from a child can qualify for Group A threshold.

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