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What you need to know about gift tax in Ireland
When is Capital Acquisitions Tax (CAT) due on gifts of money?
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In Ireland, gifting money to your loved ones is pretty easy, but it’s important to bear in mind that some gifts might be subject to Capital Acquisitions Tax (CAT). On this page, you’ll learn everything you need to know about gift tax in Ireland, including tax-free thresholds, exemptions, and how the €3,000 annual gift allowance works.
Key takeaways
In Ireland, the recipient of a gift may have to pay Capital Acquisitions Tax (CAT) at 33% on gifts above thresholds that are based on their relationship to the giver
Gifts to spouses and civil partners, charities, or small, everyday presents from a person’s income are exempt from gift tax in Ireland
In Ireland, beneficiaries may receive up to €3,000 from any one person per year tax-free, and this is separate from the larger limits that apply over a lifetime
The information provided here is for informational and educational purposes only and does not constitute tax advice. You should consult with a qualified tax professional or adviser regarding your individual tax situation. Tax laws and regulations are complex and subject to change, and the information provided may not be applicable to your specific circumstances. We are not liable for any tax decisions or actions you take based on this information.
What is gift tax in Ireland?
In Ireland, gift tax (officially known as Capital Acquisitions Tax, or CAT) applies when someone receives a gift or inheritance above a certain value. Gift tax is designed to prevent Irish citizens from avoiding inheritance tax by giving away their money or assets as gifts before they die.
What counts as a gift?
A gift can be anything you give that has value, such as money, possessions, and property. It can also be something that has decreased in value. For example, if you sell your house for less than its actual value to your child, the difference in value can count as a gift.
How much money can you gift to a family member tax-free in Ireland?
Not all gifts are taxable, and there are certain types of gifts that are exempt from gift tax. However, the tax implications of gifting money depend on whom the gift goes to and how much money the gift is worth.
In Ireland, gift tax is structured around threshold groups, which means that, for instance, children can receive far more than a niece or friend before tax applies. The thresholds and groups below are correct as of 2 October 2024.
Group | Capital Acquisitions Tax threshold | Beneficiary (the person receiving the benefit) |
Group A | €400,000 | Your children (including adopted, step- and in some cases foster children) |
Group B | €40,000 | Brother, sister, niece, nephew, grandparent, grandchild, lineal ancestor or lineal descendant |
Group C | €20,000 | Everyone else (friends, in-laws, etc.) |
There’s no limit on gifts made to exempt beneficiaries, but if you want to make a gift to someone who is not an exempt beneficiary, you have an annual tax-free allowance.
How much is the annual gift allowance?
Aside from the lifetime CAT thresholds, you’re allowed to give up to €3,000 each calendar year as a tax-free gift. In Ireland, this is known as your annual gift allowance or small gift exemption. With your annual gift allowance, you can give away assets or money up to a total of €3,000 to any recipient without them being added to the value of your estate. Once you exceed this allowance, the excess amount might be subject to inheritance tax later on.
With this allowance, you’re not limited to gifting to one person. So if you have two children, you can give them €3,000 each in the same year. If you’re planning multiple gifts, one way to keep track of each gift is to set up a dedicated savings account to deposit and grow the funds.
Which gifts are exempt from gift tax in Ireland?
Some of the types of gifts that are excluded from gift tax in Ireland include the following:
Everyday gifts that you take out of your income to give as Christmas or birthday presents, or, in some instances, when you gift money to your children. In order to remain exempt, once you’ve given the gift, you must still be able to maintain your usual standard of living.
Any gift you give to your spouse or civil partner, including inheritance.
Payments that are aimed at helping another person’s living costs can also be exempt from gift tax. The recipient of this type of gift might be an elderly relative or a child who’s under the age of 18.
- Charitable donations, contributions to trusts, and gifts to institutions such as art galleries, museums, and heritage funds are also exempt from gift tax in Ireland.
When can you gift money in Ireland?
Yes, the timing of your gift matters. You can give up to €3,000 per calendar year (1 January to 31 December) to one person without that person having to pay tax on it. So, how much is gift tax in Ireland? If you gift over €3,000 in a year, the person receiving the gift will be liable for Capital Acquisitions Tax at a rate of 33% on the excess.
That’s why planning your gifts carefully can help ensure the recipient keeps more of it. This might mean taking advantage of the yearly tax-free allowance by spreading smaller gifts over more than a year.
Saving with Raisin
If you’re thinking about gifting money to family in Ireland, you can grow your funds quickly in a high-yield savings account. At Raisin, you can compare competitive rates and apply to open fixed term and demand deposit accounts from a variety of banks, all with one simple registration. Find out how it works or register for free to get started.
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