Foreign Tax Obligations for Irish Beneficiaries

Inheriting assets from abroad creates tax obligations that many Irish beneficiaries do not expect. Unlike income tax, where the source country often takes priority, Ireland taxes its residents on gifts and inheritances received from anywhere in the world. For a broader view of how international estates are handled, see our guide to cross-border inheritance in Ireland.

This guide explains when CAT applies to foreign inheritances, how double taxation relief works, and the steps you need to take to report a foreign inheritance to Revenue. Understanding these obligations early helps you avoid penalties and ensures you claim every relief available.

How CAT applies to foreign inheritances

Capital Acquisitions Tax (CAT) is Ireland's tax on gifts and inheritances. If you are resident or ordinarily resident in Ireland for tax purposes, you are liable for CAT on all inheritances you receive — regardless of where the assets are located or where the person who left them to you (the disponer) lived.

CAT is also triggered if the disponer is resident or ordinarily resident in Ireland, even if the beneficiary lives abroad. In practice, this means a foreign inheritance can be taxable in Ireland if either party has an Irish tax residence connection.

Ordinary residence is a distinct concept from residence. You become ordinarily resident in Ireland after three consecutive years of tax residence, and you remain ordinarily resident until you have been non-resident for three consecutive years. This means you can owe Irish CAT on a foreign inheritance even in a year when you are not technically tax resident, if you are still ordinarily resident.

There is an important exception for people who are not domiciled in Ireland — meaning Ireland is not their permanent legal home. A foreign-domiciled individual is not treated as resident or ordinarily resident for CAT purposes unless they have been Irish tax resident for five consecutive tax years immediately before the year of assessment. This means a person who moves to Ireland from abroad may not be liable for CAT on foreign inheritances during their first years of residence, even if they are technically tax resident.

Current CAT thresholds and rate

The amount you can inherit tax-free depends on your relationship to the disponer. Each group has a lifetime threshold — once your total taxable gifts and inheritances exceed that threshold, you pay CAT at 33% on the excess. These thresholds apply from 2 October 2024.

The CAT rate has been 33% since 6 December 2012. This rate applies equally to domestic and foreign inheritances. The thresholds are lifetime cumulative — every taxable gift and inheritance you receive from disponers within the same group is aggregated against a single threshold.

Double taxation relief: Ireland's treaty network

When a foreign inheritance is taxed in both Ireland and the country where the assets are located, you may end up paying tax twice on the same property. Ireland addresses this through two mechanisms: formal double taxation treaties, and unilateral relief for countries without a treaty.

Ireland has double taxation treaties for inheritance tax purposes with only two countries: the United Kingdom and the United States. While Ireland has 75 income tax treaties in effect (78 signed), the inheritance tax network is far more limited. For inheritances from all other countries — including EU member states like France, Germany, and Spain — you rely on unilateral relief.

How the UK treaty works

The Ireland-UK treaty covers Irish CAT and UK Inheritance Tax (IHT). It applies to both gifts and inheritances. Ireland taxes based on the residence of the disponer or beneficiary, while the UK taxes based on domicile — the country the person regards as their permanent home.

Under the treaty, Ireland gives credit for UK IHT paid on UK-situated property. The credit equals whichever is lower: the UK tax or the Irish tax at the effective rate. The credit cannot exceed the Irish CAT actually paid on the property.

How the US treaty works

The Ireland-US convention covers Irish Inheritance Tax and US federal estate tax. It does not apply to gift tax, and it does not cover taxes imposed by individual US states. This is an important distinction — some US states levy their own estate or inheritance taxes, and these are not covered by the treaty.

Under the convention, Ireland gives credit for US federal estate tax paid on US property. The credit equals whichever is lower: the US tax or the Irish tax at the effective rate. The treaty also includes what Revenue calls a “situs code” — rules that determine where each type of asset is treated as being located for treaty purposes. For example, shares are generally treated as located where the company is incorporated.

To claim US treaty relief, file a CAT return through ROS or myAccount with supporting documentation from the US tax authorities. The claim must be made within six years of the date of the event.

Unilateral relief for all other countries

For inheritances from countries other than the UK and US, Ireland provides unilateral relief under Section 107 of the Capital Acquisitions Tax Consolidation Act 2003. This relief applies to any foreign tax that is similar in character to estate duty, gift tax, or inheritance tax.

The credit equals whichever is lower: the Irish CAT attributable to the foreign property, or the foreign tax actually paid on that property. If the foreign tax exceeds the Irish CAT on the property, you cannot recover the difference — no refund is available.

To claim unilateral relief, file your IT38 return through ROS or myAccount and include documentation from the foreign tax authority confirming the tax paid. There is no specific form for the foreign documentation — Revenue accepts certificates or receipts issued by the relevant tax authority.

Comparing the three relief mechanisms

The table below summarises the key differences between the UK treaty, US treaty, and unilateral relief. Understanding which mechanism applies to your inheritance determines how much relief you can claim.

Reporting requirements: filing the IT38 return

You'll need to file an IT38 return with Revenue if the total taxable value of all gifts and inheritances you have received exceeds 80% of your relevant group threshold. This obligation applies even if no CAT is actually due — for example, because double taxation relief eliminates the liability. Filing is one of the key duties that fall on executors when an estate includes foreign assets.

The filing deadline depends on the valuation date of the inheritance. The valuation date is normally the earliest date on which the property can be retained for your benefit, is actually retained, or is transferred to you.

Late filing incurs a surcharge of 5% of the tax due (capped at €12,695) if filed within two months of the deadline. After two months, the surcharge increases to 10% (capped at €63,485). Interest also accrues on any unpaid tax from the due date.

Practical steps when you receive a foreign inheritance

Receiving an inheritance from abroad involves additional steps compared to a purely Irish estate. In the estates we coordinate, foreign inheritances from the UK are the most common cross-border scenario, but we regularly see inheritances from the US, Australia, and EU countries too. Working through these steps early reduces the risk of missed deadlines or unclaimed relief.

When you need professional help

Foreign inheritances are among the most complex areas of Irish tax. The interaction between two countries' tax systems, currency conversion, asset valuation rules, and relief calculations makes professional guidance particularly valuable. A Chartered Tax Advisor with cross-border experience can identify reliefs you might not know about and ensure your return is filed correctly.

Professional review is especially recommended when the inheritance includes foreign property or business interests abroad, when assets are in a country with no Irish treaty, or when the estate involves beneficiaries across multiple countries. Mistakes in cross-border tax returns can be costly to correct and may trigger Revenue enquiries. For an overview of all the costs involved in managing an estate, see our guide to probate costs in Ireland.