CAT for executors

Executors often assume Capital Acquisitions Tax is a cost of the estate that they need to budget for. In Ireland, it is not. CAT is charged on each beneficiary individually, based on their own threshold, their own prior receipts, and their own circumstances. The executor's role is narrow but important: to keep the information on which the beneficiaries' CAT is based accurate, and to not distribute the estate in a way that leaves beneficiaries unable to meet the charge.

What the executor does on CAT

Three specific duties.

1. File the SA2 accurately. The SA2 is the Statement of Affairs (Probate) form that lists every asset and liability of the estate at the date of death. It is the foundation of every beneficiary's IT38 return. If the SA2 understates asset values, Revenue will later query the IT38s and beneficiaries bear the consequences. If the SA2 gets the beneficiary details wrong (relationship, PPS number), beneficiaries file against the wrong Group or fail to file at all. Accuracy on the SA2 is therefore an executor duty that protects beneficiaries.

2. Inform beneficiaries of their position. No statutory obligation, but strong practice. Each beneficiary needs to know: - What they are inheriting and its value at the valuation date - Their relationship-based CAT Group (A, B, or C) - Their group threshold and any remaining headroom - The IT38 filing deadline relevant to them - Any reliefs they may be entitled to claim (Dwelling House Exemption, Section 72 proceeds, Agricultural Relief)

A short written note to each beneficiary, issued when the Grant is produced, avoids half the confusion.

3. Obtain Revenue clearance before distributing in full. This is the only area where the executor has personal liability exposure. Distributing the estate before Revenue has confirmed in writing that no outstanding tax remains, then discovering a tax charge, exposes the executor personally if the distributed beneficiaries cannot or will not return the funds. Full explanation of Revenue clearance.

What the executor does not do

The executor does not file IT38 returns on behalf of the beneficiaries. Each beneficiary files their own return, based on their own circumstances and aggregation history. Even where the executor is also a beneficiary, their IT38 is filed in their capacity as beneficiary, not as executor.

The executor does not pay CAT out of the estate. CAT is the beneficiary's tax. In practice, a beneficiary may agree that the executor hold back part of their inheritance to cover the CAT and pay it on their behalf, but this is a convenience arrangement between them, not a legal duty.

The executor does not structure reliefs. Reliefs like Dwelling House Exemption, Agricultural Relief, and Section 72 are claimed by each beneficiary on their own IT38. The executor provides the facts the beneficiary needs (dates of residence, valuations, policy proceeds), but does not make the claim.

The valuation date

One term that causes confusion: the valuation date is the date the beneficiary becomes entitled to the inheritance. For most estates, this is the date the Grant of Probate issues, not the date of death.

The valuation date matters because:

• Assets are valued on the IT38 at their valuation-date value
• The IT38 filing deadline depends on the valuation date
• Reliefs are tested as at the valuation date (e.g. whether the beneficiary owns another dwelling at that date)

For a Grant that issues on 15 September 2026, the valuation date is 15 September 2026, the IT38 filing deadline is 31 October 2027, and the values on the IT38 are the values as at 15 September 2026, not February 2026 when the deceased died.

For executors this means: provide beneficiaries with valuations at both the date of death (for the SA2) and the valuation date (for the IT38). A property worth €550,000 on the date of death may be worth €575,000 six months later when the Grant issues; the IT38 uses the latter.

Executor personal liability

The specific way executors get caught out: distributing in full before Revenue clearance, then finding an unexpected CAT liability that the distributed beneficiaries cannot or will not return.

The classic scenario: an executor distributes €200,000 to each of four children on the basis that the estate is well within Group A thresholds for each. Revenue later queries the SA2, identifies that a 2015 gift from the deceased to the eldest child had been under-declared, and assesses additional CAT of €15,000 on that child. The child has spent the €200,000 and refuses to pay. Revenue pursues the executor personally for the €15,000 plus interest.

Defensive practice:

1. Retain a reserve. Hold back at least 10% of the estate until Revenue clearance is in hand, or longer if any aggregation is uncertain.
2. Ask Revenue for clearance in writing. The Letter of No Audit confirms Revenue does not propose to raise any further tax.
3. Document beneficiary inputs. If beneficiaries fail to declare prior gifts on their side, that is their failure, but the executor's position is strengthened by written records showing what information was sought and what they provided.
4. Get professional advice on large estates. The personal liability exposure on a €50,000 CAT surprise is €50,000. Paying a solicitor or tax adviser €2,000 to avoid that is cheap insurance.

When to retain a tax adviser

An executor handling a standard estate typically does not need a tax adviser. The SA2 is straightforward, beneficiary positions are clear, and Revenue clearance is routine.

Retain a tax adviser when:

• The estate includes a business or farm claiming Agricultural Relief or Business Relief
• Any beneficiary's prior gifts since 1991 are disputed or poorly documented
• The estate crosses €1 million in value
• There are foreign assets with cross-border CAT implications
• The estate includes a Section 72 policy that needs to be structured correctly between the policy provider, the executor, and the beneficiary

On a straightforward estate with none of these features, the executor's CAT role is to file the SA2 accurately, brief the beneficiaries, retain a reserve, and wait for Revenue clearance. That is a manageable workflow with the Complete Bundle's workbooks.