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Same Event Relief

In circumstances where an asset is transferred without any tax relief being available, a CGT and CAT liability may arise at the same time. The CAT can be reduced by the CGT paid on that transaction.

Example; John gifts shares to his son Joe. John is deemed to have received the market value of those shares, which gives rise to a CGT liability of say, €100,000. Michael meanwhile had already absorbed his lifetime threshold and is subject to CAT of €20,000. The CGT paid by John can be used to offset Joe’s CAT liability, as the two tax liabilities arise upon the same event.

A clawback of this credit may arise if the property is sold by the beneficiary within 2 years.