I. Rate Changes for CAT and CGT to 22%

The CAT rate increased from 20% to 22% in respect of gifts and inheritances taken on or after 20 November 2008.

The rate of CGT on disposals made on or after 14 October 2008 has also increased from 20% to 22%. This rate change should have been noted for the purposes of the 31 January 2009 CGT payments deadline, when CGT on disposals made between 1 October 2008 and 31 December 2008 fell due for payment.

II. Indexed CAT Tax Free Thresholds for 2009

Revenue have confirmed the CAT tax free threshold figures for 2009 as follows:

For the purposes of calculating CAT, the aggregate of gifts and inheritances taken from disponers to which the same tax-free group thresholds apply is taken into account when calculating CAT. The aggregate is then reduced by the tax-free amount and the balance is taxed at 22%, for gifts and inheritances taken on or after 20 November 2008 (previously the rate was 20%).

The Group A threshold applies where the beneficiary is –

• a child, or a minor child of a deceased child of the disponer.
• a parent taking an absolute inheritance from a child have a Group A threshold. However, if the child took a non-exempt gift or inheritance from either parent in the previous five years, any inheritance taken by a parent from that child is exempt.

The Group B threshold applies where the beneficiary is –

• a lineal ancestor e.g. parent or grandparent (parent takes a Group B threshold where they take a gift or a limited interest in an inheritance)
• a lineal descendant e.g. a grandchild or great-grandchild;
• a brother or sister;
• a child of a brother or sister of the disponer.

The Group C threshold applies to “strangers” i.e. where the relationship between disponer and beneficiary falls outside either Group A or Group B.