Filing your IT38 return

Once the probate application is complete and beneficiaries have received their inheritances, the tax side moves from the executor to the beneficiaries themselves. Each beneficiary who receives an inheritance above 80% of their Group threshold must file an IT38 return with Revenue. Below that trigger, no return is needed even if a small gift has been received.

This page covers when to file, how to file, the 80% trigger, what goes on the return, when the payment is due, and the most common mistakes.

When you must file an IT38

You must file an IT38 if your total benefits from the same group, since 5 December 1991, add up to more than 80% of your group threshold.

At current thresholds that means:

• Group A (parent to child): filing required once lifetime receipts exceed €320,000 (80% of €400,000)
• Group B (siblings, nieces, nephews, grandchildren): filing required once lifetime receipts exceed €32,000 (80% of €40,000)
• Group C (all others): filing required once lifetime receipts exceed €16,000 (80% of €20,000)

Below these figures, no return is required even though Revenue still encourages you to keep records. Above these figures, the return is required whether or not you ultimately owe any tax, because Revenue uses the return to track lifetime aggregation against the threshold.

The filing deadline

The IT38 deadline depends on the valuation date, which is the date on which the value of the inheritance is fixed (usually the date of the Grant of Probate, though for some benefits it can be the date of death). The two cases:

• Valuation date between 1 January and 31 August: file the IT38 and pay any tax due by 31 October of the same year.
• Valuation date between 1 September and 31 December: file the IT38 and pay by 31 October of the following year.

If you file the IT38 and make the payment through ROS (Revenue Online Service), the deadline is extended by a few weeks (typically to mid-November), in line with the extension applied to income tax. The extension applies only when both filing and payment are done online via ROS.

In practice, the valuation date for most inheritances is the date the Grant of Probate issues. Check your Grant date, then apply the two rules above to find your 31 October deadline.

If you miss the deadline, interest accrues daily and a surcharge applies: 5% of the tax due (capped at €12,695) if the return is filed within two months of the deadline, or 10% (capped at €63,485) if filed later. The surcharge applies even where reliefs would otherwise reduce the tax to zero.

How to file

The IT38 is filed online through Revenue's systems:

• Beneficiaries who are PAYE-only use myAccount. Under "Gifts and Inheritances," select "File an IT38 Return."
• Beneficiaries with other Revenue obligations use ROS.
• In special cases a paper IT38 form is available on request but online filing is the expected route.

You need your PPS number, the deceased's PPS number, the details of each asset inherited with its value at the valuation date, and details of any prior gifts or inheritances received from the same group since 5 December 1991.

What goes on the return

An IT38 has five main parts:

1. Beneficiary details. Name, PPS, address.
2. Details of the gift or inheritance. Who from, what relationship, valuation date, nature and value of each asset received.
3. Aggregation. Every prior benefit received from anyone in the same group since 5 December 1991, with the value of each as it was then declared.
4. Reliefs claimed. Dwelling House Exemption, Agricultural Relief, Business Relief, Section 72 insurance, Favourite Nephew or Niece Relief. Each has its own form section with supporting information required.
5. Computation and declaration. The system calculates the tax once all inputs are in. The beneficiary declares the return is true and correct.

Mistakes at the aggregation step are the most common cause of Revenue queries. A benefit received twenty years ago from a now-deceased grandparent still counts toward the Group B threshold. Revenue's records go back to 1991 and they will cross-reference.

Paying the tax

Any CAT owing is paid at the same time as the IT38 is filed. Revenue accepts payment by debit or credit card online, or by Single Debit Authority through your nominated bank account.

If the tax due is significant and paying in one hit would be hard, Revenue will in some cases accept an instalment arrangement. This is not automatic and requires a written application before the deadline, demonstrating why immediate payment would cause hardship. Full options for paying CAT.

Common mistakes

Missing the 80% trigger. Beneficiaries often think a return is only needed if tax is due. It is not. Above 80% of the threshold, the return is mandatory regardless of whether reliefs reduce the charge to zero.

Aggregation omissions. Beneficiaries forget the €50,000 wedding deposit from a grandmother 15 years ago. Revenue does not.

Valuation date confusion. The valuation date for inheritances is generally the date the beneficiary becomes entitled, which is usually the date of the Grant of Probate, not the date of death.

Dwelling House Exemption self-assessment errors. The beneficiary self-certifies the conditions are met. Getting the three-year or six-year test wrong exposes them to a later audit and full tax charge. Full Dwelling House rules.

Filing per estate rather than per group. Each return covers benefits from one group. If you inherit from two separate groups (Group A from a parent and Group B from an aunt in the same year), you file two returns.

Late filing on small estates. Some beneficiaries assume that a small inheritance does not need a return. If total Group A lifetime receipts pass €320,000, or Group B €32,000, or Group C €16,000, a return is required even where the inheritance itself is modest.

When a tax adviser is essential

File your own IT38 where: - Your situation is straightforward (one inheritance, one or two simple assets, no reliefs beyond Dwelling House) - Your aggregation history is known and documented - You are claiming no more than the Dwelling House Exemption on a standard parent-to-child inheritance

Use a tax adviser where: - Agricultural Relief or Business Relief is being claimed - There are foreign assets and Double Taxation Agreement credits - Aggregation includes disputed historical gifts - The total CAT exposure is above €50,000 and a small structuring error costs five figures