Capital Acquisitions Tax (CAT) is payable on the “taxable value” of a gift or inheritance. The taxable value of a gift or inheritance is determined in accordance with section 28 of the Capital Acquisitions Tax Consolidation Act 2003. Section 28 provides that the taxable value of a gift or inheritance is calculated by deducting “any liabilities, costs and expenses that are properly payable out of the taxable gift or taxable inheritance” from the market value of the property comprised in that gift or inheritance. This amount, referred to as the “incumbrance free value”, is then reduced further by any consideration paid by the person receiving the gift or inheritance (i.e., the beneficiary).
I am advised by Revenue that where a person receives a property by way of a gift or inheritance and the person engages the services of a professional services firm such as a law firm or a firm of tax advisors in relation to the receipt of that gift or inheritance, Revenue will generally accept that fees incurred on the professional services can be deducted to determine the taxable value of that gift or inheritance to the extent that such fees are necessarily and reasonably incurred in connection with the receipt of the gift or inheritance.
If a person has a query in relation to the taxation of a specific gift or inheritance they have received, they may wish to present full details of the query to Revenue via MyEnquiries, which is accessible by logging into myAccount on the Revenue website. In addition, contact details for Revenue’s National Capital Acquisitions Tax Unit are available on the Revenue website at www.revenue.ie/en/contact-us/customer-service-contact/national-capital-acquisitions-tax-cat-unit.aspx.
