Favourite niece or nephew relief calculator
Section 27 of the Capital Acquisitions Tax Consolidation Act 2003 allows a niece or nephew to be treated as a Group A beneficiary for CAT purposes if they worked substantially full-time in the disponer's business for five years before the gift or inheritance, and the gift itself consists of business assets. The difference is the threshold jumping from €40,000 (Group B) to €400,000 (Group A). This calculator tests the five qualifying conditions.
How the relief works
Section 27 of the Capital Acquisitions Tax Consolidation Act 2003 treats a niece or nephew as a Group A beneficiary (the €400,000 threshold that normally applies only to children) where all five statutory conditions are met. The tests are cumulative, so missing any one of them drops the beneficiary back to Group B.
The five conditions are: (1) a direct niece or nephew of the disponer, (2) the beneficiary worked in the disponer's trade, business, or profession, (3) for at least five continuous years ending on the date of the gift or inheritance, (4) substantially full-time (24+ hours per week), and (5) the property transferred consists of business assets used by the disponer in that trade. Cash, private property, and passive investments never qualify, even if tests 1 to 4 are all met.
The five-year period runs backwards from the gift or inheritance date. Gaps, other employment, or reduced hours can interrupt the period, meaning the five years must be continuous and substantially full-time throughout. Revenue interprets "substantially full-time" as at least 24 hours per week on a regular basis.
What counts as a business
The relief applies to assets used in a trade, profession, or vocation carried on by the disponer. It does not extend to:
- Passive rental income or investment portfolios
- Farming (Agricultural Relief is a separate, broader relief)
- Non-trading holding companies
If the disponer ran a retail shop, professional practice, engineering firm, or any active commercial enterprise, and the niece or nephew was substantially employed in it for 5 years, the relief will typically apply.
The tax saving
A €300,000 inheritance from an aunt to a niece, without the relief, is taxed on €260,000 (€300,000 minus Group B €40,000) at 33% = €85,800 in CAT. With the relief applied (treated as Group A), the same €300,000 sits fully within the €400,000 Group A threshold, so zero CAT is owed. The saving is the full €85,800.
The maximum saving on a single inheritance is roughly €118,800 (33% of the difference between the Group A and Group B thresholds, €360,000).
This calculator is a preparation tool using Irish tax rates and rules for 2026. It is not legal or tax advice. For complex estates, consult a solicitor or tax adviser. All values are estimates based on the information you provide.