CAT Group A, B and C Thresholds After Budget 2025 (€400k / €40k / €20k): Who Falls Into Each
Irish Capital Acquisitions Tax (CAT) gives you a tax-free threshold based on how you are related to the person giving the gift or inheritance. Since 2 October 2024 those thresholds are €400,000 for Group A (a child of the disponer), €40,000 for Group B (a sibling, niece/nephew or grandchild), and €20,000 for Group C (everyone else). Anything you receive above your lifetime group threshold is taxed at a flat 33%.
The single most common CAT mistake is putting yourself in the wrong group. The difference between Group A and Group B is twenty times the tax-free room (€400,000 versus €40,000), so getting the relationship right is worth far more than any clever planning trick. This guide walks through exactly who sits in each group, what changed in Budget 2025, the tricky cases (foster children, step-children, grandchildren whose parent has died), and a fully worked example so you can see the maths.
The three CAT groups at a glance
Your relationship to the disponer (the person making the gift or whose estate you inherit) decides which of three group thresholds applies. The thresholds below are the current figures for any gift or inheritance taken on or after 2 October 2024.
| Group | Tax-free threshold | Who falls into it |
|---|---|---|
| Group A | €400,000 | A child of the disponer (including an adopted child, a step-child and, in certain cases, a foster child); a minor grandchild whose parent has died; a parent inheriting an absolute interest on the death of their child |
| Group B | €40,000 | A brother or sister; a niece or nephew (a child of a sibling); a grandchild; a lineal ancestor (parent taking a gift, grandparent) or other lineal descendant |
| Group C | €20,000 | Everyone else — uncles, aunts, cousins, grand-nieces, grand-nephews, in-laws, friends and unrelated beneficiaries |
The rate above the threshold is the same for all three groups: 33%, which has applied since 6 December 2012 (Revenue — CAT rates). The thresholds and relationship definitions are set out by Revenue at CAT group thresholds and CAT groups.
Group A — €400,000
Group A is the parent-to-child relationship. A "child" for CAT includes an adopted child and a step-child, who are treated identically to a natural child. The group also covers some less obvious cases that I explain under "Edge cases" below: a foster child in defined circumstances, a minor grandchild (under 18) whose parent — who was a child of the disponer — has died, and a parent who inherits an absolute interest on the death of their own child.
Group B — €40,000
Group B is the wider-family group. It covers a brother or sister of the disponer; a niece or nephew (defined as a child of a brother or sister); a grandchild; and other lineal ancestors and descendants — for example a grandparent receiving from a grandchild, or a great-grandchild. Note the asymmetry: a parent taking a gift (or a limited interest) is in Group B, even though a parent who inherits absolutely from a deceased child gets the Group A threshold.
Group C — €20,000
Group C is the catch-all: any beneficiary who is not in Group A or Group B. That includes uncles and aunts, cousins, grand-nephews and grand-nieces, in-laws, partners who are not married or in a civil partnership, and friends. If you cannot point to a specific Group A or Group B relationship, you are in Group C.
What changed in Budget 2025
Budget 2025 (announced 1 October 2024) raised all three thresholds for the first time in years. The new figures apply to any gift or inheritance where the date of the gift, or the date of death for an inheritance, is on or after 2 October 2024 (RTÉ — Budget 2025).
| Group | Old threshold (to 1 Oct 2024) | New threshold (from 2 Oct 2024) | Increase |
|---|---|---|---|
| Group A | €335,000 | €400,000 | +€65,000 |
| Group B | €32,500 | €40,000 | +€7,500 |
| Group C | €16,250 | €20,000 | +€3,750 |
CAT is assessed by reference to the date of the gift or the date of death, not the date you file the return or actually receive the money. If your aunt died on 20 September 2024 but probate only completed in 2026, the benefit is still measured against the old €16,250 Group C threshold — not €20,000 — because death is the operative date. The same applies to lifetime gifts: a gift made before 2 October 2024 used the old threshold, and it still counts at that old value when Revenue later aggregates your gifts. Always pin down the operative date before you reach for a threshold.
Worked example: a €60,000 gift to a niece
Síle gives her niece Aoife €60,000 in May 2026 to help her buy a first home. Aoife has never received any prior gift or inheritance from her aunt or from anyone else in Group B. A niece is the child of the disponer's sibling, so Aoife is firmly in Group B (€40,000 threshold).
The maths, step by step:
- 1. Start with the benefit: €60,000.
- 2. Apply the annual small-gift exemption. The first €3,000 of gifts from any one person in a calendar year is exempt from CAT. So the taxable value drops to €60,000 − €3,000 = €57,000. (This exemption applies to gifts only, not inheritances.)
- 3. Deduct the unused Group B threshold of €40,000: €57,000 − €40,000 = €17,000 taxable.
- 4. Apply CAT at 33%: €17,000 × 33% = €5,610 CAT due.
If you ignore the small-gift exemption and simply take €60,000 − €40,000 = €20,000 taxable, the tax is €20,000 × 33% = €6,600. The €3,000 small-gift exemption is what brings the bill down to €5,610. Either way, Aoife must file an IT38 return because the gift uses up more than 80% of her Group B threshold.
Two practical points fall out of that example. First, the annual small-gift exemption of €3,000 per donor per year is real, valuable and easy to overlook — it can be used every single year and is the backbone of long-term gifting plans. Second, the 80% rule: once the total of your benefits in a group reaches 80% of that group's threshold, you are obliged to file an IT38 self-assessment return even if no tax is ultimately payable. For Group B that trigger is €32,000 (80% of €40,000).
How lifetime aggregation eats your threshold
The group threshold is a lifetime allowance, not a per-gift allowance. Revenue adds together the taxable value of every benefit you have taken within the same group since 5 December 1991, and the threshold is shared across all of them (Revenue — CAT aggregation rules). Each new benefit sits on top of the running total, and tax is charged on the part that pushes the cumulative figure above the threshold.
Dáithí is an only child. Over his life his parents give and leave him benefits in Group A:
- 2010 — €120,000 gift from his father (counts at its date-of-gift value).
- 2019 — €150,000 inheritance from his father.
- 2026 — €200,000 inheritance from his mother.
Aggregation works like this. The first €270,000 (the 2010 and 2019 benefits) fits comfortably under the €400,000 Group A threshold, so no CAT arose at the time. When the €200,000 arrives in 2026, the cumulative Group A total becomes €270,000 + €200,000 = €470,000. The first €130,000 of the 2026 benefit uses up the remaining threshold (€400,000 − €270,000), and the balance of €70,000 is taxable at 33% = €23,100 CAT. The threshold did not "reset" between his father and his mother — both are Group A, so they draw on the same €400,000 pot.
The flip side is that aggregation only happens within a group. A benefit from a parent (Group A) does not reduce the threshold available for a benefit from an aunt (Group C), and vice versa. The three pots are independent of each other.
Edge cases that trip people up
Foster children
A foster child can qualify for the Group A threshold, but only in defined circumstances. Broadly, the child must have been cared for and maintained at the disponer's expense and lived with them as a member of the family for periods totalling at least five years before turning 18 — and Revenue will look for evidence. Foster Child Relief also extends certain Group B treatment to relatives of foster parents in some cases. Because foster relationships are fact-specific, get advice before relying on Group A.
Step-children and adopted children
This one is simple and generous: a step-child and a legally adopted child are treated exactly like a natural child and get the full Group A €400,000 threshold. A step-child does not need to be formally adopted to qualify — the step-relationship through marriage or civil partnership is enough.
Grandchildren and the deceased-parent rule
A grandchild normally sits in Group B (€40,000). But there is an important exception: if a grandchild is a minor (under 18) and their parent — who was a child of the disponer — has already died, that grandchild "steps into the shoes" of the deceased parent and qualifies for the Group A €400,000 threshold. The relief is narrow: it only applies while the grandchild is under 18, and only where the linking parent (the disponer's child) is deceased. An adult grandchild, or a grandchild whose parent is still living, stays in Group B.
Parents inheriting from a child
A parent who receives an absolute inheritance on the death of their child is in Group A (€400,000). But a parent who takes a gift from a living child, or only a limited interest (such as a life interest) on death, is in Group B. The distinction between an absolute interest and a limited interest matters here, so it is worth confirming how the benefit is structured.
- Current thresholds (from 2 Oct 2024): Group A €400,000, Group B €40,000, Group C €20,000; the rate above threshold is 33%.
- The operative date is the date of the gift or the date of death — a pre-2 Oct 2024 benefit still uses the old €335k / €32.5k / €16.25k figures.
- Adopted and step-children get full Group A treatment; foster children can qualify under conditions; a minor grandchild whose parent (the disponer's child) has died can use Group A.
- The threshold is a lifetime, per-group allowance — all benefits in the same group since 5 December 1991 are aggregated against it.
- File an IT38 once your benefits reach 80% of the relevant threshold, even if no tax is due.
Frequently asked questions
What are the current CAT thresholds for Group A, B and C in Ireland?
For any gift or inheritance taken on or after 2 October 2024, the thresholds are €400,000 for Group A (a child of the disponer), €40,000 for Group B (siblings, nieces/nephews, grandchildren) and €20,000 for Group C (everyone else). Anything above the relevant lifetime group threshold is taxed at 33%.
Why do the old thresholds (€335,000 / €32,500 / €16,250) still matter?
CAT is assessed by reference to the date of the gift or the date of death, not the date you file or receive the benefit. A gift made or a death that occurred before 2 October 2024 is measured against the old thresholds, and that old value still counts when Revenue later aggregates your benefits within a group.
How much CAT is due on a €60,000 gift to a niece?
A niece is in Group B (€40,000 threshold). Taking the €3,000 annual small-gift exemption, the taxable value is €57,000, less the €40,000 threshold = €17,000 taxable, at 33% = €5,610 CAT. Without the small-gift exemption it would be €20,000 taxable = €6,600. An IT38 return is required because the gift exceeds 80% of the threshold.
Is a step-child or adopted child in Group A?
Yes. For CAT a "child" includes an adopted child and a step-child, so both get the full Group A €400,000 threshold and are treated exactly like a natural child. A step-child does not need to be formally adopted to qualify.
When can a grandchild use the Group A threshold instead of Group B?
A grandchild is normally in Group B (€40,000). The exception is a minor grandchild (under 18) whose parent — who was a child of the disponer — has died. That grandchild steps into the deceased parent's place and qualifies for Group A (€400,000) while still under 18.
Do gifts from different relatives share the same threshold?
Only if they are in the same group. All benefits within one group since 5 December 1991 are aggregated against that group's single lifetime threshold. Benefits in different groups (for example a parent in Group A and an aunt in Group C) draw on separate, independent thresholds.
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