Imperius Wealth

Estate Financial Planning – All You Need to Know

Estate Financial Planning also known as Inheritance Tax Planning is the act of preparing for the transfer of a person's wealth and assets after their death. All assets, not limited to but including, life insurance, pensions, property, cars, personal belongings, and debts are all part of one's estate. As much as we covet our assets, we cannot take them with us when we die, unlike the ancient Egyptians!

Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.

A now famous quote attributed to Benjamin Franklin and one that is factually correct for the purposes of our piece.

When you die, you probably want to control how your assets are given to your family, friends or even charities or organisations close to your heart. To ensure your wishes are carried out, you need to consider estate financial planning to provide instructions stating whom you wish to receive your assets, what you want them to receive, and when they are to receive it. It is normal to assume that you would want as much of the assets you have built up over your lifetime to be passed on and to have minimal taxes, legal fees and court costs applied to these assets. Unfortunately if you have reasonably modest estate taxes will be applied, but with careful planning these can be reduced substantially, if not eliminated completely.

Capital Acquisitions Tax (CAT) is the tax charged when a gift or inheritance is received. CAT comprises two separate taxes – a Gift Tax payable on lifetime gifts and an Inheritance Tax payable on inheritances received on a death.

Capital Acquisitions Tax (CAT): Who is liable?

The beneficiary of the estate, i.e. the person receiving the gift, is primarily liable for the payment of Capital Acquisitions Tax. Whether or not a charge to tax arises depends on whether the disponer (the person who is “providing the gift or inheritance”) or the beneficiary (the person receiving the gift or inheritance) is resident or ordinarily resident in the state at the date of the gift or inheritance. If the disponer or the beneficiary is resident or ordinarily resident in Ireland, then the entire estate will be liable to Capital Acquisitions Tax in Ireland. If both the disponer and the beneficiary are not resident or ordinarily resident in Ireland, then only Irish assets will be liable to tax e.g. Irish property, shares in an Irish company, money in an Irish bank account, etc.

Who pays the tax due?

The tax is paid by the beneficiary and this can sometime cause issues, for example if the beneficiary receives a property the they wish to live in then they need to pay the tax due on that asset and may not have the ready cash to do so. This would mean that they may have to raise capital by selling other assets or by incurring a debt.

€335,000 threshold

Under the current rules, more than €1 million can be left tax-free by parents who have three children, so that each child can receive €335,000. In 2015, just €675,000 could be passed on tax-free to three children; however, the total figure is down by 38 per cent on 2009.

In 2019, inheritance or gift tax of €522 million was paid on €1.6 billion worth of assets. Figures also show that more people are paying capital acquisitions tax (CAT) in 2019; about 16,000 people and a 46 percent increase on the numbers who paid it in 2011 (roughly 11,000).

As you might expect, inheritance tax is primarily a Dublin issue thanks to the capital city’s average property prices. Since 2011, the number of Dublin residents who have to pay property tax has soared by almost 70 percent – from 4,155 to 7,002 in 2019.

Categories of beneficiary

Group A

The Group A threshold applies where you, the beneficiary, on the date of the gift or inheritance are:

  • a child, stepchild or potentially a parent if you take an absolute interest.

Group B

The Group B threshold applies where you, the beneficiary, on the date of the gift or inheritance are:

  • a parent of the disponer, where you take a gift or a limited interest, a brother or sister, nephew or niece (there is a relief known as favourite niece or nephew relief that may apply), a grandchild, grandparent or a lineal descendant.

Group C

The Group C threshold applies where you, the beneficiary, on the date of the gift or inheritance have a relationship to the disponer not already covered in Groups A or B.

Group thresholds

Each group has a tax-free threshold amount that applies from 7 December 2011.

The threshold is cumulative and applies to the total taxable benefits you have received in that group. (You must include the taxable value of any previous gifts and inheritances received since 5 December 1991 in the same group.)

You only pay tax on the value of a gift or inheritance above the tax-free group threshold amount.

Tax-free thresholds


Group A

Group B

Group C

On or after 9 October 2019




10 October 2018 – 08 October 2019




12 October 2016 – 09 October 2018




14 October 2015 – 11 October 2016




06 December 2012 – 13 October 2015




07 December 2011 – 05 December 2012




CAT rates

The standard rate of CAT for gifts and inheritances received on or after 6 December 2012 is 33%.

The following are the rates that apply from 1 December 1999.

CAT rates for inheritance or gifts

Date of benefit

Threshold amount


On or after 06 December 2012



07 December 2011 – 05 December 2012



08 April 2009 – 06 December 2011



20 November 2008 – 07 April 2009



01 December 1999 – 19 November 2008




  • Gifts between spouses or civil partners are exempt from CAT
  • Some gifts between previously married partners
  • Payments for maintenance, education or support payments for children still in education
  • You are exempt from Capital Acquisitions Tax (CAT)on the inheritance of a dwelling house if you satisfy certain conditions.
  • If you are a dependent relative, the exemption also applies to a gift of a dwelling house, where you satisfy certain conditions.
  • If you are permanently incapacitated because of physical or mental infirmity, gifts or inheritances you receive exclusively for the purposes of discharging ‘qualifying’ expenses are exempt from Capital Acquisitions Tax (CAT).
  • Qualifying expenses are expenses for medical care, including the cost of maintenance associated with medical care.
  • Capital Acquisitions Tax (CAT)exemption applies to retirement benefits, redundancy payments or pension payments paid to you by your employer. 
  • There is also a small gifts exemption of €3,000 per annum that is exempt, these are not taken into account for aggregation purposes either.
  • Charitable gifts are exempt to registered charities both inside and outside Ireland.
  • Certain government securities if held for a predetermined time.
  • Heritage property (religious artefacts, historical artefacts, certain historical works of art) may be exempt if held by the state in a museum or they have historical significance and are not held for the purposes of trading.

In summary the tax due on a gift from an estate could be substantial, however there are some reliefs and exemptions that can be used to offset the tax burden and in order to make the most of these you have to start planning whilst still alive as many of these planning strategies cease on death, much like the person passing on the assets!

Estate financial planning is very complex and there are some rules that need to be followed in order to avail of certain exemptions. Imperius Wealth can help to guide you through the maze of possibilities to ensure that your hard-earned assets pass to the right people at the right time whilst making the most of any reliefs and allowances.

Please contact us today to talk to one of our highly qualified professionals about estate financial planning.

Picture of Gerard Frew

Gerard Frew

Chartered Adviser


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