CAT thresholds after Budget 2027
Budget 2027 raised the tax-free thresholds for gifts and inheritances. The rate stays at 33% on anything above your threshold.
The new thresholds
| Group | Who, mainly | From 7 Oct 2026 | Before |
|---|---|---|---|
| A | Son or daughter | €420,000 | €400,000 |
| B | Brother, sister, nephew, niece, grandchild, parent (gift) | €44,000 | €40,000 |
| C | Anyone else | €22,000 | €20,000 |
The new thresholds apply to gifts and inheritances taken on or after 7 October 2026. Anything you receive from your spouse or civil partner is exempt.
Who is in each group
- Group A: a child of the owner (including adopted children and stepchildren), a child under 18 of the owner's deceased child, some foster children, and a parent who inherits outright from their child.
- Group B: a brother or sister, a nephew or niece, a grandchild not in Group A, a grandparent, and a parent taking a gift.
- Group C: everyone else, including cousins, in-laws, friends, and an uncle or aunt receiving from a nephew or niece.
Your threshold is a lifetime limit
Each threshold covers the taxable value of the gifts and inheritances you've received within that group since 5 December 1991, after any reliefs. Small gifts of up to €3,000 a year from each person don't count. Gifts from both parents, for example, all count against the same Group A threshold.
In 2015 Niamh's parents gave her €106,000 towards a house. After the €3,000 small gift exemption from each of them, €100,000 counts. She now inherits a farm worth €600,000 that doesn't qualify for agricultural relief.
| Counted in Group A | €700,000 |
|---|---|
| Above the threshold | €700,000 − €420,000 = €280,000 |
| Tax | €280,000 × 33% = €92,400 |
If the farm did qualify for agricultural relief, it would count at €60,000. Her total would be €160,000 and no tax would be due, though she'd still need to file.
What the tax looks like without reliefs
| Value received | Son or daughter (A) | Nephew or niece (B) |
|---|---|---|
| €500,000 | €26,400 | €150,480 |
| €1,000,000 | €191,400 | €315,480 |
| €2,000,000 | €521,400 | €645,480 |
These figures assume no earlier gifts and no reliefs. For a working farm, agricultural relief usually changes the picture completely.
Small gifts
The first €3,000 of gifts you get from any one person in a calendar year is exempt and doesn't use up your threshold. This applies to gifts only, not inheritances.
When you must file
You must file an IT38 return if the total you've received in a group goes over 80% of that group's threshold, or if you claim agricultural or business relief, whatever the value. Pay and file by 31 October: in the same year if the valuation date falls between 1 January and 31 August, and in the following year if it falls between 1 September and 31 December.
Other Budget 2027 news for farm families
For succession farm partnerships registered from 1 January 2027, the tax credit rises from €5,000 to €10,000 a year, and the 3-year holding period is removed for applications made from that date.
Common questions
What is the CAT threshold for a son or daughter?
€420,000 for gifts and inheritances taken on or after 7 October 2026. It was €400,000 before that.
What is the rate of inheritance tax in Ireland?
33% on the amount above your tax-free threshold.
Do gifts from both parents get separate thresholds?
No. Gifts and inheritances from either parent all count against the same Group A threshold.
See what the reliefs would mean for your own farm. It takes about five minutes, and your answers stay on your phone.