Week 1 - CAT Flashcards
From what date is a gift/inheritance within the charge to CAT?
1/12/1999
From 1/12/1999 a gift/inheritance is within the charge to CAT if?
- Either the disponer or donee/successor is Irish resident or ordinary resident or
- If the subject of the gift/inheritance is an Irish asset.
What is meant by beneficially entitled in possession?
This is defined in the act as having a present right to the enjoyment of the property as opposed to having a future such right.
When is a gift taken?
A gift is taken where a disposition is made by a disponer whereby a donee becomes beneficially entitled in possession otherwise than on a death to any benefit otherwise than for full consideration.
When is an inheritance taken?
An inheritance is taken where a disposition is made by a disponer whereby a successor becomes beneficially entitled in possession on a death to any benefit otherwise than for full consideration.
What does the amount of CAT payable depend on?
- Relationship between disponer/beneficiary.
- Taxable value of gift/inheritance.
- Prior benefits the beneficiary has received from disponers in the same group threshold since 5 December 1991.
What are the tax free threshold?
Group A - Child or minor child of a deceased child.
Group B - Lineal ancestor, lineal descendent (other than a child or minor child of a deceased child), brother, sister, child of brother or sister.
Group C - Any other person.
What are allowable deductions?
Liabilities, costs & expenses must be “properly payable out of the taxable gift or taxable inheritance” to be deductible.
What is the small gift exemption?
First €3’000 of all gifts each year from each disponer is exempt.
Are gifts and inheritances between spouses/civil partners exempt from CAT?
Yes.
How can you check if someone is resident in the Ireland?
An individual is resident for a tax year if he/she:
- is present for 183 days in the tax year.
- is present for 280 days in the tax year and the previous tax year (Known as the “look back” rule).
- But, not resident in any year in which an individual is present for 30 days or fewer.
Explain what it means to be ordinarily resident.
- An individual becomes ordinarily resident after he/she has been resident for each of the 3 previous years.
- An individual will remain ordinarily resident unless he/she has been non-resident for each of the 3 previous years.
What’s the exception to the charge for CAT?
- A non domiciled individual is not considered resident/ordinarily resident (for CAT purposes) unless he/she was resident in Ireland for 5 consecutive years preceding the date of the benefit and on that date was either resident or ordinarily resident.
In addition the date of the gift must be after 1 December 2004.
