U.S. TAX GUIDE IN IRELAND
What is Capital Acquisitions Tax (CAT) in Ireland? 
Capital Acquisitions Tax, or CAT, is a tax on gifts and inheritances received in Ireland. If you’re a US expat in Ireland and you receive assets like property, cash, or investments, you might need to pay CAT.
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How does CAT apply to different kinds of gifts and inheritances
CAT covers two main areas: Gift Tax and Inheritance Tax. Both are taxed at 33%, but the amount you can receive tax-free varies depending on your relationship to the giver:
- Parent to Child: Up to €335,000 tax-free.
- Close Relatives (siblings, nieces, nephews, grandchildren): Up to €32,500 tax-free.
- Others: Up to €16,250 tax-free.
Do US citizens living in Ireland need to worry about CAT?
Yes. Unlike the US, where the giver pays the gift tax, in Ireland, the recipient (you) is responsible for CAT if the gift or inheritance value exceeds the tax-free limit.
When might you have to pay CAT?
You’ll need to pay CAT if the total value of gifts or inheritances you receive goes beyond the threshold. This applies to assets both within and outside of Ireland, as long as the giver is an Irish resident.
What steps should you follow to report and pay CAT?
- Calculate the Value: Add up the total value of all gifts or inheritances.
- Check Against the Threshold: See if your total surpasses the tax-free amount.
- Fill Out Form IT38: This form is used to report and pay CAT.
- Submit Your Form: File it online via Revenue’s Online Service (ROS) or mail it in.
- Make Your Payment: Pay through ROS or other payment options.
Are there ways to legally reduce your CAT bill?
Yes, you can lower your CAT liability by using options like:
- Annual Exemption: Receive up to €3,000 tax-free from any individual each year.
- Dwelling House Exemption: Under certain conditions, you can inherit a house without paying CAT.
- Agricultural and Business Relief: These can reduce the taxable value of certain properties.
- Spousal Transfers: Assets transferred between spouses or civil partners are generally exempt from CAT.
