Capital Acquisitions Tax Consolidation Act 2003 section 28

Taxable value of a taxable gift or inheritance

Section 28 sets out how the taxable value of a taxable gift or inheritance is calculated, including the rules on deductible liabilities, costs and consideration, and the restrictions on certain deductions.

• The taxable value of a gift or inheritance taken as absolute owner is its incumbrance-free value (market value less allowable liabilities, costs and expenses) minus any bona fide consideration paid by the beneficiary.
• Where the beneficiary takes a limited interest (such as a life interest), the incumbrance-free value is first reduced using the actuarial tables in Schedule 1 before deducting any consideration paid.
• Certain liabilities are not deductible, including contingent liabilities, reimbursable costs, liabilities created by the beneficiary, CAT payable on the gift or inheritance itself, and incumbrances on exempt property.
• Where a liability deprives the beneficiary of the use or enjoyment of the property (such as a right of residence), the deduction is based on the market value of the appropriate part of the property attributable to that liability.

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