CAT tax payment calculation query

I've been trying to figure out a possible underpayment in relation to CAT tax dilema and im getting two conflicting tax amounts due.

In 2019 I recieved €397000 from my father. I paid the CAT on it then and it was €28710. The threshold was 310,000 from father to daughter.

In 2022 my father died and left me and additional €46000. I paid CAT on this @33% which was €15180. So I assumed all my CAT tax was paid.

However, I noticed an online calculation from Revenue this year, and applying that calculation I have made an underpayment. It was something like (397000 from 2019+ 46000 from 2022) - 335000 (2022 threshold) = 108000 @Cat 33% = €35640. That would mean i made an underpayment of over 20000 3 three ago????

Surely thats incorrect as I've already paid €28710, making my total CAT bill 64K odd??

I got advise in 2022 telling me anything over then threshold was taxed at 33%. Im freaking out here as I don't have that money to pay an additional tax bill and interest and penalties.

@McK

Read the posting guidelines and edit the thread title accordingly. Replies have been deleted until you do so.

Sorry I meant 2018. The 3K small gift has already been taken into account. I did the calculation and got a tax friend to check it. I actually rang Revenue last week on a private number and they told me i had underpaid based on a calculation on their website. Here's the link. It's example four in the link.https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-thresholds.aspx

In relation to your 2022 inheritance of €46k ("current benefit"):

Group A threshold at the date of inheritance was €335,000.

The taxable value of your prior benefit was €397,000.

Therefore, you had no remaining threshold in 2022 to set against your current benefit.

So, CAT @ 33% on €46,000 = €15,180.

What is the calculation from revenue.ie that has spooked you? It didn't come through in your post above.

You may have actually overpaid tax in 2019, unless 2019 is a typo?

In 2019 the Group A threshold was €320,000, not €310,000. If we include the Small Gift Exemption of €3k (as you received a gift), then the taxable benefit was €394,000, not €397k. The taxable excess was €74,000 (€394k - €320k), and so the CAT payable was €24,420. You paid €28,710.

Then I asked Revenue again and they told me I had overpaid based on this calculation. 443,000 (2018 & 2022 as its cumulative ) - 335000 (threshold 2022) = 108000. 33% = 35,640. Then from this €35640 - 28710 I had already paid in 2018, means I should have only paid €6930.

Im freaking out because I've got two different amounts from Revenue. €64350 and €6930.!!!

I have updated the link from Revenues website with Example 4 above. I can only post one link as im a new user

Thanks for the edits above!

I can see how that example might have spooked you! The layout of that example isn't great, and doesn't apply to your situation as you were over the threshold at the time of both benefits whereas that example had unused threshold for the second benefit.

The proper layout where there were prior benefits is per the following 6 steps:

1. Group Threshold =€335,000
2. Taxable Value Prior Benefits = €397,000
3. Unused Portion of Threshold = Nil
4. Taxable Value of Current Benefit within same Group Threshold = €46,000
5. Taxable Excess on Current Benefits = €46,000
6. Tax on Current Benefit = €15,180

If you go back to the example and plug in the numbers following the steps above, you will get the same answer as the example.

Revenue's Guide to Completing the IT38 can be found here and the methodology above can be found on Page 26 (Example 3).

Thanks for your help. That example from my link wasn't there is 2022. Also when I rang Revenue ammounously last week and referenced this, it was then they said it would be 64k I should have paid. I literally have not slept all week.

Do NOT rely on Revenue for advice on uncertainties like this, as doing so is likely only to lead to further uncertainty and stress for you.

You should have gone instead to Citizens Information, whose core functions, unlike Revenue, include dispensing advice to the public in a sympathetic and kind fashion.

So from the about advice I have paid my CAT correctly?

Yes you have