By Richie Lennon
Ireland’s Small Gift Exemption allows a recipient to receive up to €3,000 from each giver in each calendar year without using their CAT group threshold. Larger gifts may still be tax-free within the recipient’s remaining threshold. For gifts from 7 October 2026, the main thresholds are €420,000, €44,000 and €22,000, depending on the relationship. Employee rewards use different rules. Company money cannot simply be treated as the owner’s personal gift.
Start with who owns the money, who receives it and why it is being transferred. A parent helping a child, a company rewarding an employee and an owner transferring business shares can all call the payment a gift. Their tax treatment is different.
We would plan the transfer before committing it. The amount matters, but so do earlier gifts, ownership, valuation and the conditions of any relief. An annual exemption is useful; it is not a substitute for a succession plan.
What is Capital Acquisitions Tax?
Capital Acquisitions Tax, or CAT, applies to taxable gifts and inheritances. The recipient is normally responsible for the tax. The current rate is 33% on the taxable amount above the applicable remaining threshold, after relevant exemptions and reliefs.
CAT and Capital Gains Tax are different taxes. A non-cash gift can raise a CGT question for the person giving the asset as well as a CAT question for the recipient. Calling a transfer a gift does not mean both sides are tax-free.
If the giver agrees to pay the recipient’s CAT, that can increase the gift being made. Calculate the full arrangement rather than treating the tax payment as invisible.
See Revenue’s CAT overview and calculation guidance.
CAT thresholds: use the date and the relationship
Revenue’s current table distinguishes gifts before and after the October 2026 change:
| Group | Common relationship | From 7 October 2026 | 2 October 2024 to 6 October 2026 |
|---|---|---|---|
| A | Parent to child, subject to the detailed group rules | €420,000 | €400,000 |
| B | Siblings, grandparents, grandchildren, nieces and nephews, subject to exceptions | €44,000 | €40,000 |
| C | Relationships outside A and B | €22,000 | €20,000 |
These are group thresholds, not a fresh allowance from each relative. Taxable benefits received within the same group since 5 December 1991 are aggregated.
Group A is not a general rule for gifts both ways between parents and children. The detailed conditions and exceptions matter. Gifts and inheritances between spouses or civil partners are generally exempt from CAT; they do not consume a Group A allowance.
Use Revenue’s current group table and exemption guidance. Older €335,000, €32,500 and €16,250 figures are not the current thresholds for a new gift.
How the €3,000 Small Gift Exemption works
The exemption applies per giver, per recipient, per calendar year. It is the total value given by that giver during the year that matters, not the number of transfers.
Three genuine €1,000 gifts from one parent in the same year total €3,000. Splitting them into instalments does not itself create a tax problem or increase the exemption. Giving €3,000 twice in the same year is not two exempt annual gifts.
Different givers can each make an exempt gift. Two parents can each give €3,000 to one child in a calendar year: €6,000 in total. The exempt amounts do not use the child’s CAT group threshold.
| Illustration | Amount covered by the annual exemptions |
|---|---|
| One parent gives €3,000 to one child | €3,000 |
| Two parents each give €3,000 to one child | €6,000 |
| Two parents each give €3,000 to each of two children | €12,000 across the family |
| The same two-parent, two-child pattern for ten years | €120,000, assuming the rules continue and gifts genuinely occur each year |
You can make a genuine gift in December and another in January because they fall in different calendar years. You cannot carry unused annual exemptions forward, backdate a transfer or make today’s payment consume exemptions from years in which no gift occurred.
The Small Gift Exemption applies to gifts, not inheritances. See Revenue’s exemption guidance.
A larger family gift is not automatically taxable
Suppose a parent gives an adult child €50,000 on 20 October 2026. Assume this is the only gift from that parent during the year, the full €3,000 exemption is available and the child has no earlier taxable Group A benefits:
| Calculation | Amount |
|---|---|
| Gift | €50,000 |
| Small Gift Exemption | €3,000 |
| Taxable benefit after exemption | €47,000 |
| Group A threshold | €420,000 |
| CAT due in this illustration | €0 |
| Remaining Group A threshold | €373,000 |
The absence of CAT does not mean the €47,000 disappears from the record. It reduces the threshold available for later Group A benefits.
Now assume the same recipient has already used €410,000 of Group A through taxable benefits. The €47,000 current benefit takes the aggregate to €457,000. The excess above €420,000 is €37,000, giving illustrative CAT of €12,210 at 33%.
These examples assume an outright cash gift and no other relief. They show why asking about previous benefits comes before promising a tax-free result.
Keep personal gifts separate from company money
The company’s bank account belongs to the company. A director cannot withdraw €3,000 for each family member and assume the personal Small Gift Exemption resolves the company and director tax treatment.
First establish how value lawfully reaches the owner or recipient. Salary, dividends, loans and company asset transfers have different consequences. Then consider any personal gift and the recipient’s CAT position.
A company payment to a family member can also be connected with employment or benefit-in-kind rules. A real job, appropriate pay and proper payroll records are different from labelling a payment a family gift.
Our director’s guide to dividends explains the profit and cash checks before a distribution. A family gifting plan should not bypass those checks.
Employee gifts use the Small Benefit Exemption
This is an employment rule, separate from the €3,000 CAT exemption. From 2025, up to five qualifying non-cash benefits can be provided within a combined €1,500 annual limit. Cash and vouchers redeemable for cash do not qualify, and salary sacrifice is excluded.
For example, a qualifying €1,000 voucher for each of ten employees costs €10,000 before any separate administration costs. It is not the same as paying a €1,000 cash bonus, whose payroll treatment depends on the employees’ and employer’s actual position.
Do not promise a universal €18,000 salary equivalent or a fixed net-pay saving. Calculate the comparison from the real payroll figures.
The benefits must also be reported under Enhanced Reporting Requirements on or before the relevant payment date. Exemption from payroll tax is not exemption from reporting.
See Revenue’s Small Benefit Exemption rules. Check the recipient’s actual employment or director position; do not assume that simply calling someone a director establishes entitlement.
Non-cash gifts need valuation and a wider tax review
Shares, property and other assets can be gifts, but their taxable value needs to be established. A nominal price or an informal family agreement does not automatically establish market value.
The CAT valuation date matters, and can differ from the date that determines the applicable threshold or rate. Check the legal interest actually transferred, any consideration, liabilities and relevant conditions. Revenue explains the taxable value of a gift.
For a share transfer, obtain a defensible valuation and review the share rights, transfer documents, company records and any stamp-duty or CGT consequences. There is no universal €10,000 cutoff below which a valuation stops mattering.
Business Relief can help, but it is conditional
CAT Business Relief can reduce the taxable value of qualifying relevant business property by 90%. It is not a blanket exemption for everything a company owns.
The business, ownership and retention conditions need checking. Excepted assets can sit outside the reduction, and later events can withdraw the relief. A cash-rich investment business should not assume the same treatment as a qualifying trading business.
For illustration, if €600,000 of property fully qualifies and no other adjustment is required, a 90% reduction leaves €60,000 before the remaining CAT calculation. That is not a claim that any €600,000 company qualifies or that the final tax is zero.
See Revenue’s Business Relief overview and calculation rules.
Our view on succession is to begin with the intended outcome, not a relief name. Who will own the shares, who will control the business and what will the current owner need to live on? Review the tax conditions before the transfer is committed. Breaking ownership into annual gifts is not automatically the best plan.
Keep a gift record, including amounts that are exempt
Record the giver, recipient, relationship, actual date, value and evidence of the transfer. For non-cash gifts, retain the valuation and legal documents. Keep earlier taxable benefits grouped correctly, including inheritances and gifts from other people in the same group.
An exempt €3,000 gift should be identifiable as a real transfer. A note written later does not change the actual gift date. Keep cumulative records for as long as they are needed to establish the remaining threshold, rather than discarding that history at the next annual tax review.
For employee benefits, keep a separate register of qualifying benefits, values, dates and reporting. That is a payroll record, not the employee’s personal CAT gift history.
Filing can be required before tax is payable
Revenue’s general rule requires an IT38 when aggregate taxable benefits exceed 80% of the relevant group threshold. Claiming Business Relief or Agricultural Relief also requires a return even where that general test is not exceeded. Other specific reporting rules can apply.
A gift covered entirely by the Small Gift Exemption does not, by itself, require a CAT return. Keep the evidence nevertheless.
The valuation date determines the normal pay-and-file deadline:
| Valuation date | Normal deadline |
|---|---|
| 1 January to 31 August | 31 October in that year |
| 1 September to 31 December | 31 October in the following year |
For example, a valuation date of 20 October 2026 normally means 31 October 2027. It is not a universal “four months from the gift” deadline. Check any specific extension or special arrangement before relying on it.
See Revenue’s return requirements and pay-and-file rules.
Cross-border gifts need their own review
Irish CAT can apply through the giver’s or recipient’s residence or ordinary residence, or because the property is in Ireland. Special rules apply to foreign-domiciled people, and older dispositions or trusts can need separate analysis.
For a foreign-domiciled person, the five-consecutive-year rule concerns how residence is treated for CAT. Living in Ireland for five years does not itself make someone Irish-domiciled.
The other country may have its own tax and reporting rules. Do not assume a child living abroad removes Irish CAT, or that Irish birth alone resolves the liability. Use Revenue’s cross-border guidance and get advice on both jurisdictions where relevant.
Where Around Finance fits
A routine annual cash gift and a business succession transaction need different levels of work. For shares, company-funded payments, property or cross-border arrangements, use our tax accountant service to discuss the scope and any specialist input needed. There is no universal advice fee or promised tax saving in this guide.
If you run an ongoing Irish business turning over €250,000 or more and need wider finance support, a Finance Fit Call can assess the fit. A standalone family gift does not require a monthly business service.
FAQs
What is the Small Gift Exemption in Ireland?
It covers up to €3,000 received from each giver in each calendar year. The exempt amount does not use the recipient’s CAT group threshold. Add together all gifts from the same giver during that year; it is not €3,000 per transfer.
How much can I gift to a family member tax-free?
The €3,000 annual exemption is one part of the answer. A larger gift can be covered by the recipient’s remaining group threshold or another exemption. From 7 October 2026 the main group thresholds are €420,000, €44,000 and €22,000. Relationship, earlier benefits and the gift date matter; spouses and civil partners have a separate CAT exemption.
Can I give employees tax-free gifts?
Qualifying non-cash benefits can use the employment Small Benefit Exemption: up to five benefits within €1,500 in total each year. Cash, cash-redeemable vouchers and salary sacrifice do not qualify. Keep the benefit records and complete the required employer reporting.
What are the rules for gifting business shares tax-free?
Establish the value, the recipient’s CAT position and any Business Relief conditions, alongside the giver’s possible CGT and stamp-duty questions. A €3,000 share gift is not automatically free of every tax. Complete the legal and company records and review the intended ownership and control.
Do I need to report a tax-free gift to Revenue?
A gift entirely within the Small Gift Exemption does not by itself require an IT38. Larger benefits need an aggregation and filing review. Revenue’s general 80% threshold test, claims for particular reliefs and other specific reporting rules can require a return before CAT is payable.
Does the Small Gift Exemption apply every year?
Yes. It is a calendar-year exemption per giver and recipient. Genuine December and January gifts use separate years, but unused allowances cannot be carried forward and past gifts cannot be invented or backdated.
What is the difference between gift tax and inheritance tax?
Both are CAT. Gifts are generally benefits during the giver’s lifetime; inheritances arise after death, with specific rules and exceptions. Taxable benefits within the same group are aggregated. The Small Gift Exemption applies to gifts, not inheritances.
Can a gift to someone abroad still attract Irish CAT?
Yes. The giver’s and recipient’s residence or ordinary residence, the property’s location and special foreign-domicile rules can matter. The other country may also tax or require reporting. Being abroad is not a blanket Irish exemption.
How can I plan gifts over several years?
Use genuine annual transfers with clear records and track the remaining group thresholds. Make sure the giver can afford the plan. For business shares, review valuation, control and relief conditions before deciding whether annual small transfers serve the intended succession outcome.
When should I speak to a tax adviser about gifting?
Before committing a transfer involving business shares, company money, property, trusts, cross-border facts or significant earlier benefits. Complexity matters more than a fixed euro cutoff. Agree the scope, documents, taxes and any specialist advice needed before the transfer takes place.
