Capital Acquisitions Tax Consolidation Act 2003 section 107

Other relief from double taxation

Section 107 provides for unilateral credit relief against Irish gift tax or inheritance tax where foreign tax of a similar character has been paid on the same property in connection with the same event.

• Where foreign property included in a taxable gift or inheritance has also been subject to a similar tax abroad, Revenue may allow a credit for the foreign tax against the Irish gift tax or inheritance tax payable on that property.
• The credit is capped at the lesser of the Irish tax attributable to the foreign property or the amount of foreign tax actually paid — so the relief cannot exceed the Irish tax on that property or the foreign tax, whichever is lower.
• Unilateral credit relief under this section is overridden by any double taxation agreement given force of law under section 106 — if such a treaty provides its own credit mechanism, the treaty rules apply instead.
• Where the terms of a disposition direct that foreign tax on one benefit is to be paid out of a different benefit under the same disposition, the credit is attributed to the benefit that would naturally bear the foreign tax, not the benefit actually funding the payment.