Capital acquisitions tax (CAT) is an important consideration when deciding how best to transfer assets to the next generation. A son or daughter can receive gifts and inheritances of up to €320,000 from their parent before having to pay CAT. However, the balance of the gift or inheritance is then liable for CAT at 33%.
For some high-net-worth individuals, purchasing agricultural property can be a tax-efficient method of passing assets on to a son or daughter. This is because agricultural property may qualify for certain CAT reliefs which, with appropriate planning, can reduce or even eliminate your child’s CAT liability.