Capital Acquisitions Tax Consolidation Act 2003 section 52

Set-off of gift tax paid in respect of an inheritance

Section 52 provides that where a gift becomes an inheritance because the disponer dies within two years of making the gift, any gift tax already paid is treated as a payment on account of the inheritance tax due.

• Where a person (the disponer) makes a gift and dies within two years of the date of the disposition, the gift is reclassified as an inheritance for Capital Acquisitions Tax purposes.
• Any gift tax already paid on the original gift is credited against the inheritance tax now due.
• The amount paid is treated as a payment on account of the inheritance tax, reducing the net liability arising on the death.
• If the gift tax already paid exceeds the inheritance tax due, the excess may be refundable; if less, only the balance of inheritance tax remains payable.