Inheritance Tax in Ireland 2026: Thresholds, Rates, and How to Reduce What You Owe
Inheritance tax in Ireland is officially called Capital Acquisitions Tax (CAT). It's charged at 33% on the value of a gift or inheritance above your tax-free threshold, and the threshold you get depends on your relationship to the person who gave it to you.
One thing worth correcting up front: CAT is not a tax on the estate. It's a tax on the person receiving the gift or inheritance, calculated against their own personal lifetime threshold. If three siblings each inherit a share of a parent's estate, each one calculates their own CAT separately, against their own threshold, not against a single "estate tax" bill.
Key takeaways
- Rate: CAT is a flat 33% on the value above your tax-free threshold. Source: Revenue.ie
- Thresholds (2026): €400,000 from a parent (Group A), €40,000 from a sibling/grandparent/grandchild (Group B), €20,000 from anyone else (Group C).
- Thresholds are lifetime, not per-inheritance. Every gift and inheritance you've received in that group since 5 December 1991 counts toward the limit.
- There is no "7 year rule" in Ireland. That's a UK inheritance tax concept. Ireland's aggregation runs since 1991, with no rolling exemption period for gifts made years before death.
- Spouses and civil partners pay no CAT at all, and everyone gets a separate €3,000-a-year small gift exemption on top of their threshold.
- Business Relief and Agricultural Relief can each cut the taxable value of qualifying assets by 90%, which is usually the difference between a large tax bill and none at all for family farms and businesses.
- CAT is paid and filed via Form IT38, with a deadline that depends on when in the year the valuation date falls.
How much is inheritance tax in Ireland?
The rate is 33%, and it's applied only to the amount above your threshold, not the whole gift or inheritance. Source: Revenue.ie
Worked example: Sarah leaves her only child a house worth €500,000. The child has received no other gifts or inheritances from a parent before.
- Group A threshold: €400,000
- Taxable excess: €500,000 − €400,000 = €100,000
- CAT due: 33% of €100,000 = €33,000
If that same child had already received a €50,000 gift from Sarah at some point since 1991, that gift counts against the same €400,000 threshold, leaving less room before this inheritance and increasing the tax due. If you are unsure how to calculate your liability it may be worthwhile getting in touch with an experienced professional accountant that can guide you. You can browse accountants near you to quickly find potential options close to you.
Inheritance tax thresholds in Ireland (how much can I inherit tax-free?)
The tax-free threshold depends on your relationship to the disponer (the person giving the gift or inheritance), not the value of the estate as a whole.
| Group A | Group B | Group C | |
|---|---|---|---|
| Tax-free threshold | €400,000 | €40,000 | €20,000 |
| Applies to | Child of the disponer (including adopted, step, and certain foster children); in some cases a parent inheriting from a child | Parent receiving a gift, sibling, niece/nephew, grandparent, grandchild | Any other relationship — including in-laws, cousins, friends, unmarried partners |
Source: Revenue.ie — CAT thresholds and Revenue.ie — CAT groups
These thresholds are cumulative for life, covering everything you've received in that group since 5 December 1991, not a fresh allowance per gift.
The "7 year rule": why it doesn't apply here
If you've searched this, you're likely thinking of the UK, where a gift becomes fully exempt from inheritance tax if the giver survives 7 years after making it (a "potentially exempt transfer"). Ireland has no equivalent rule.
What Ireland does have, which is easy to confuse with it:
- Lifetime aggregation since 1991, not a rolling window. A gift from 15 years ago still counts against your threshold today, unlike the UK's 7-year taper.
- A 2-year rule around death, but a narrower one: if a gift is made and the disponer dies within 2 years, the valuation date for CAT purposes can be affected, which is a technical valuation-timing point, not a survivorship exemption. Source: Revenue.ie — Important dates for CAT
There's no mechanism in Irish CAT law where simply surviving a fixed number of years after making a gift removes it from the tax net.
How to avoid or reduce inheritance tax in Ireland
There's no way to eliminate CAT outright if you're above your threshold, but several reliefs and exemptions reduce or remove the liability for specific circumstances. To ensure you are not missing out on any reliefs, search for an accountant close to you to get trusted advice.
Small Gift Exemption
The first €3,000 of gifts from any one person in a calendar year is exempt, and it doesn't count toward your lifetime threshold at all. It applies per giver, so you could receive €3,000 tax-free from several different people in the same year. It applies to gifts only, not inheritances, and needs no tax return. Source: Revenue.ie — Small Gift Exemption
Spouse and civil partner exemption
Gifts and inheritances between spouses or civil partners are fully exempt from CAT, with no threshold or cap.
Business Relief
Reduces the taxable value of qualifying business property, such as shares in a trading company, by 90%, subject to conditions on the nature of the business and holding period. Source: Revenue.ie — Business Relief
Agricultural Relief
Reduces the taxable value of agricultural property, including farmland, by 90%, provided the beneficiary meets the "farmer" test (broadly, that agricultural property makes up at least 80% of their assets after the gift or inheritance). If the property doesn't qualify for Agricultural Relief, it may still qualify for Business Relief instead. Source: Revenue.ie — Agricultural Relief
Dwelling House Exemption
You may be exempt from CAT entirely on an inherited home if you meet Revenue's residence conditions around the property before and after the inheritance. Conditions are detailed and subject to clawback if broken, so this is one to check carefully rather than assume. Source: Revenue.ie — Exemption for a dwelling house
Favourite Nephew/Niece Relief
A qualifying nephew or niece who has worked substantially full-time in the disponer's business for the 5 years before the gift or inheritance can be treated as a "child" for threshold purposes, getting the €400,000 Group A threshold instead of the €40,000 Group B one, on the business assets. Source: Revenue.ie — Favourite Nephew or Niece Relief
Paying and filing CAT
CAT is self-assessed. You file Form IT38 and the deadline depends on your valuation date:
- Valuation date between 1 January and 31 August → pay and file by 31 October of that year.
- Valuation date between 1 September and 31 December → pay and file by 31 October of the following year.
Source: Revenue.ie — How and when do you pay and file?
A return is required even if no tax is owed, once the gift or inheritance exceeds 80% of the relevant group threshold, or if you're claiming Agricultural or Business Relief regardless of value.
This article is for general information and is not tax advice. CAT reliefs in particular carry detailed conditions and clawback rules, and getting them wrong can be costly. If you're dealing with a specific inheritance, especially one involving a farm, business, or property, talk to an accountant before you file. Find an accountant near you.