When Does Residency Trigger a CAT Liability?
Capital Acquisitions Tax (CAT) applies to gifts, inheritances, and certain discretionary trust distributions. A CAT liability may arise if any of the following apply:
- The disponer (person giving the gift or inheritance) is Irish tax resident or ordinarily resident.
- The beneficiary is Irish tax resident or ordinarily resident.
- The property is an Irish-situated asset (e.g., Irish property, Irish shares).
Important Note for Non-Domiciled Individuals: They are treated as non-resident or non-ordinarily resident for CAT unless they’ve been Irish tax resident for 5 consecutive tax years before the gift/inheritance.
How Is Irish Tax Residence Determined?
- 183-day rule: Present in Ireland for 183+ days in the tax year.
- 280-day rule (look-back): Present for 280 days over current and previous year (min 30 days each year).
- <30 days present = ignored for residency.
Ordinary Residence:
- You become ordinarily resident after 3 consecutive years of Irish tax residence.
- You cease to be ordinarily resident after 3 consecutive years of non-residence.
Irish Resident or Ordinarily Resident Disponer:
When an Irish resident disponer gives a gift or leaves an inheritance, the entire value of the gift/inheritance becomes potentially taxable. The tax is calculated based on:
- The value of the asset
- The relationship between the disponer and beneficiary
- Cumulative gifts and inheritances received since 5 December 1991
Likewise, if a beneficiary is Irish resident, the value of asset and relationship is considered in applying the group thresholds.
The Standard CAT rate of 33% applies to any amounts received about the threshold.
See our Residency Calculator also.
