How to pay CAT from the estate in Ireland
CAT is a beneficiary tax, not an estate tax, so the legal responsibility sits with each beneficiary individually. In practice, executors often pay CAT from estate funds before distribution because it is administratively simpler. This page covers how that works in Ireland, when it is and is not a good idea, and the Revenue process.
CAT is a beneficiary tax, not an estate tax. Each beneficiary is legally responsible for their own IT38 filing and for paying the CAT on what they inherit. In practice, however, executors often pay CAT from estate funds before distributing the residue, because it is administratively simpler and because some beneficiaries do not have liquid funds to pay the tax themselves. This page covers how that works in Ireland, when it is a good idea, and the Revenue process.
The beneficiary vs estate question
The legal default is that each beneficiary pays their own CAT. The executor's duty under the Succession Act is to distribute according to the will (or intestacy rules), and once distributed, what the beneficiary does with their inheritance, including paying CAT, is their responsibility. But many estates handle CAT at the estate level for practical reasons: the money is sitting in the estate bank account; the executor is already liaising with Revenue; a single payment is cleaner than five beneficiaries making individual arrangements.
The approach is valid provided each beneficiary consents in writing. Without consent, the executor risks a later claim from one beneficiary that their share was depleted to pay another beneficiary's tax.
Step-by-step
Step 1: Establish each beneficiary's CAT liability first. Each beneficiary files their own IT38 return (the Complete Bundle drafts these) and the tax calculated there is what is owed. Until each IT38 has been filed and the CAT figure confirmed, you do not know the total amount to pay. The executor typically drafts IT38s for each beneficiary and confirms the CAT figures before paying anything.
Step 2: Decide whether to pay CAT from the estate or have each beneficiary pay directly. Paying from the estate before distribution is simpler: one payment to Revenue, full records in one place, and an executor who has control of the timing. Paying from each beneficiary directly is more legally aligned (since CAT is their liability) but creates more administrative work and risk if one beneficiary misses the deadline.
Step 3: Agree the approach in writing with each beneficiary. Each beneficiary must consent in writing to the executor paying their CAT from the estate. This is usually a short letter confirming the CAT figure, the proposed payment method, and that the beneficiary agrees. Without consent, the executor cannot lawfully apply estate funds to the payment.
Step 4: Pay via Revenue myAccount with each beneficiary's IT38. Each IT38 is filed by the beneficiary (or by the executor on the beneficiary's behalf with written authority). At filing time, Revenue myAccount offers a payment option. The payment can come from the estate's bank account with a bereavement-department-approved transfer. Some banks need specific instructions for outgoing payments from estate accounts so check in advance.
Step 5: Record the payment in the estate accounts and the beneficiary's distribution. Every CAT payment from estate funds reduces what that beneficiary receives in their final distribution. The estate accounts must show each CAT payment separately, attributed to the correct beneficiary. A beneficiary who was to receive €400,000, whose CAT was €20,000 paid from the estate, actually receives €380,000 net after the reduction.
What to watch for
Deadlines are strict. For valuation dates between 1 January and 31 August, the IT38 and CAT payment are due on 31 October of the same year. For valuation dates between 1 September and 31 December, they are due on 31 October of the following year. Late filing triggers a 5% surcharge within two months and 10% after, plus daily interest. Paying on behalf of a beneficiary does not change these deadlines; if the estate payment is late, the beneficiary (not the estate) is the one Revenue pursues for the surcharge.
Some beneficiaries may prefer to pay their own CAT despite the executor offering to handle it. A beneficiary living abroad, a beneficiary who wants to use a tax adviser, or a beneficiary whose CAT can be reduced through their own circumstances (a DHE claim not otherwise flagged, for instance) may opt out. Respect that choice.
Finally, consider Revenue's Section 49 clearance process once all CAT has been paid. A Section 49 clearance letter protects the executor from personal liability for any undiscovered CAT shortfall later, and is worth the 8-10 week wait for estates over Group A threshold.
Related reading
What to do next
Everything in the Preparation Pack plus the full inheritance-tax layer. CAT calculator for each beneficiary, individual IT38 drafts, Dwelling House Exemption assessment, Section 72 check, Agricultural and Business Relief assessments where applicable, and the Revenue clearance letter. For estates that will cross the Group A threshold.