CAT on a Foreign Inheritance: When an Irish-Resident Beneficiary Owes 33% on Overseas Assets
If you live in Ireland and inherit a house, a bank account or shares located abroad, you can still owe Irish Capital Acquisitions Tax (CAT) at 33% on it. That's because CAT reaches worldwide assets whenever either the person who died or you, the beneficiary, is resident or ordinarily resident in the State. The relief that stops you being taxed twice is a credit for the foreign death/estate tax you already paid — but you have to claim it on the IT38.
The residence test: why foreign assets can still be Irish-taxed
Most people assume Irish inheritance tax only touches Irish property. It doesn't. Under Ireland's territoriality rules, a gift or inheritance of property wherever it is situated falls within the charge to CAT if either:
- the disponer (the person who died, or who made the gift) was resident or ordinarily resident in Ireland at the relevant date; or
- the beneficiary (you) is resident or ordinarily resident in Ireland at the date of the gift or inheritance.
Only one of those needs to be true. So an Irish-resident adult inheriting a Florida condo, a Spanish apartment or a US brokerage account is squarely within the Irish CAT net — even if the deceased never set foot in Ireland and the asset never leaves America. (Source: Revenue, CAT Notes for Guidance, Part 3.)
The exception for foreign-domiciled residents (the 5-year rule)
There is one important softener. A person who is not domiciled in Ireland is not treated as resident or ordinarily resident here for CAT purposes unless they have been Irish tax-resident for the five consecutive years immediately before the date of the benefit (and are resident or ordinarily resident on that date). In practice, a foreign-domiciled person who moves to Ireland generally becomes exposed to CAT on worldwide gifts and inheritances in their sixth year of residence, not before. (Source: Revenue, CAT Notes for Guidance, Part 3.)
The rate and the thresholds that apply
CAT is charged at a flat 33% on the taxable value above your lifetime group threshold. That rate has applied to all gifts and inheritances taken on or after 6 December 2012 (Source: Revenue, CAT rates).
Your tax-free threshold depends on your relationship to the disponer. The current thresholds, for benefits taken on or after 2 October 2024, are:
| Group | Relationship to the disponer | Tax-free threshold |
|---|---|---|
| A | Child (incl. certain foster children & some grandchildren), parent taking an absolute inheritance | €400,000 |
| B | Brother, sister, niece, nephew, grandchild, lineal ancestor/descendant | €40,000 |
| C | Everyone else (cousins, friends, strangers in blood) | €20,000 |
These figures are confirmed on Revenue's CAT group thresholds page. The same group threshold applies whether the asset is in Galway or Georgia — foreign assets do not get their own special threshold. The threshold is a lifetime figure: prior gifts/inheritances within the same group since 5 December 1991 are aggregated against it.
Worked example: an Irish-resident child inheriting a €300,000 US property
Meet Aoife. Aoife lives and works in Cork — she is Irish-resident and Irish-domiciled. Her father, Tom, was also Irish-domiciled but spent his retirement winters in Florida, where he owned a condominium. Tom dies in March 2026 and leaves the Florida condo to Aoife. The condo is valued at US$330,000 on the valuation date. Aoife has received no prior gifts or inheritances from her parents.
Because Tom was Irish-resident and Aoife is Irish-resident, the US property is fully within the Irish CAT charge. Aoife is a child of the disponer, so she uses the Group A threshold of €400,000. But she also has a US exposure: US-situated real estate owned by a non-US-domiciliary can attract US Federal Estate Tax, which the estate must settle before the property transfers. Here's how the two systems interact.
Step 1 — Convert to euro at the valuation date. CAT is computed in euro using the value on the valuation date. Assume the European Central Bank reference rate on the valuation date is €1 = US$1.10. So US$330,000 ÷ 1.10 = €300,000. (Always use the rate at the valuation date, not at death or at filing — see the currency section below.)
Step 2 — Apply the Group A threshold. Taxable value = €300,000. With the full €400,000 Group A threshold available and no prior aggregable benefits, the €300,000 sits entirely within her threshold.
Irish CAT before any foreign credit: €0. In Aoife's case, even on a worldwide-asset basis, the Group A threshold absorbs the whole inheritance, so no Irish CAT arises. She must still file an IT38 if the benefit pushes her over the filing trigger (see below) — nil tax is not the same as nil filing.
Now change one fact. Suppose Aoife had already received a €250,000 gift from Tom years earlier. That prior benefit is aggregated, leaving only €150,000 of threshold. Now the position looks like this:
| Step | Amount |
|---|---|
| US property value (US$330,000 ÷ 1.10) | €300,000 |
| Group A threshold remaining (after €250,000 prior gift) | €150,000 |
| Taxable value above threshold | €150,000 |
| Irish CAT @ 33% | €49,500 |
| Less: credit for US Federal Estate Tax paid on the same property (capped) | (see Step 3) |
Step 3 — Credit the US tax. Say the estate paid US$22,000 of US Federal Estate Tax referable to the condo, which converts to about €20,000. Under the Ireland–US estate tax convention, Ireland gives a credit for the US tax on that property at the lower of the US or Irish effective rate, and the credit cannot exceed the Irish CAT on that property. As the €20,000 of US tax is well below the €49,500 of Irish CAT on the property, Aoife credits the full €20,000.
Net Irish CAT payable: €49,500 − €20,000 = €29,500. Without claiming the credit, she would have overpaid by €20,000.
The figures above are illustrative (the FX rate and US tax are assumptions), but the mechanics — 33% rate, €400,000 Group A threshold, lower-of-the-two credit capped at the Irish CAT — reflect current Revenue rules.
Double-taxation relief: credit for foreign inheritance/estate tax
The whole point of relief is that you should not pay full inheritance tax twice on the same asset. Ireland provides two routes:
1. Treaty relief (where a convention exists)
Ireland has estate-tax conventions with the United States and the United Kingdom. For the US treaty, where an Irish resident inherits US-situated property and US Federal Estate Tax is paid, Ireland gives credit for the US tax at the lower of the US or Irish effective rate, and the credit cannot exceed the Irish CAT on that property (Source: Revenue, Double Taxation Relief (US)). Note the US convention covers US federal estate tax and Irish inheritance tax only — it does not cover US state death duties or gift tax.
2. Unilateral relief (where no treaty exists)
Where the foreign country has no convention with Ireland — think Spain, France, Portugal — Ireland still grants unilateral relief. Credit is given for a foreign tax that is similar in character to CAT (estate duty, inheritance tax, capital transfer tax) which arises on the same event and on the same property, again limited to the Irish CAT on that property (Source: Revenue, Credits you can claim against CAT).
Currency conversion: which date and which rate
Foreign assets must be brought into the CAT return in euro. The conversion is done using the exchange rate ruling on the valuation date — the date the beneficiary becomes beneficially entitled in possession (broadly, when the asset is available to be retained for the beneficiary's benefit). For an inheritance through an estate, the valuation date is usually around the grant of probate/administration, not the date of death.
- Don't use the date-of-death rate, the date-you-found-out rate, or the date-you-actually-received-the-money rate.
- Do use the valuation-date rate. A defensible source is the European Central Bank daily reference rate for that date.
- The same valuation-date principle decides which year's pay-and-file deadline you fall into (see below), so pin the valuation date down early.
Filing the IT38 for a foreign asset
You report a taxable gift or inheritance on Form IT38, filed online through ROS or myAccount. Two practical points trip people up on foreign assets:
When you must file
You are required to file an IT38 once the total taxable value of benefits you've taken within a group exceeds 80% of the relevant group threshold — even if no tax is due. For a child (Group A), 80% of €400,000 is €320,000; cross that cumulative figure and a return is mandatory (Source: Revenue, Completing your IT38).
The pay-and-file deadline
The deadline keys off the valuation date:
| Valuation date falls between… | Pay & file deadline |
|---|---|
| 1 January – 31 August | 31 October in that same year |
| 1 September – 31 December | 31 October in the following year |
(Source: Revenue, Important dates for CAT.) So Aoife, with a March 2026 valuation date, must pay and file by 31 October 2026. Late filing exposes you to interest and a surcharge, so don't let a foreign-probate delay run you past the deadline — if the foreign estate is slow, you may need to file on a best-estimate basis and amend.
Which group threshold applies
The same group rules apply to foreign assets as to Irish ones — it is your relationship to the disponer that fixes the group, not where the asset sits. A child uses Group A (€400,000) whether they inherit a Dublin terrace or a Boston brownstone.
- Irish CAT reaches worldwide assets if either the disponer or the beneficiary is Irish-resident/ordinarily resident.
- The rate is 33% above your group threshold — €400,000 (A) / €40,000 (B) / €20,000 (C) for benefits on or after 2 Oct 2024.
- You get a credit for foreign inheritance/estate tax on the same property — treaty relief (US, UK) or unilateral relief elsewhere — capped at the Irish CAT on that asset.
- Convert foreign values to euro at the valuation-date exchange rate (ECB reference rate is a good source).
- File the IT38 once cumulative benefits exceed 80% of your threshold; pay & file by 31 October (timing depends on the valuation date).
- Claim the foreign-tax credit within six years and keep the overseas tax authority's documents.
Do I owe Irish CAT on an overseas inheritance if I live in Ireland?
Most likely yes. Irish CAT applies to property anywhere in the world if either the person who died or you, the beneficiary, is resident or ordinarily resident in Ireland. The asset being abroad does not exempt it. A narrow exception applies to non-Irish-domiciled people in their first five years of Irish residence.
I already paid US estate tax on the property. Do I pay 33% again in Ireland?
No — not on the same money. Ireland gives a credit for the foreign tax paid on that property. Under the Ireland–US convention the credit is the lower of the US or Irish effective rate on the asset, and it cannot exceed the Irish CAT on that asset. You claim it on the IT38 and must keep the US tax authority's paperwork.
What exchange rate do I use to convert a foreign asset to euro?
Use the rate ruling on the valuation date — the date you became beneficially entitled in possession, usually around the grant of probate, not the date of death or the date funds actually reach you. The European Central Bank daily reference rate for the valuation date is a well-accepted source.
Which CAT group threshold applies to a foreign inheritance?
The same one as for an Irish asset: it depends on your relationship to the disponer, not on where the asset is. A child uses the Group A threshold of €400,000, a sibling/niece/nephew uses Group B (€40,000), and everyone else uses Group C (€20,000), for benefits on or after 2 October 2024.
Do I have to file an IT38 if no tax is actually due?
Possibly. A return is mandatory once your cumulative benefits within a group exceed 80% of the relevant threshold — for a child that's €320,000 — even if the threshold wipes out the tax. Nil tax is not the same as nil filing obligation.
What's the deadline to file and pay?
It depends on the valuation date. If the valuation date is between 1 January and 31 August, pay and file by 31 October that year. If it's between 1 September and 31 December, the deadline is 31 October the following year. Late filing brings interest and a surcharge.
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