If it’s going to adult children (i.e. 21+), it’s taxed separately at a special rate of 30% and doesn’t count against thresholds.
If it’s going to a child under 21, it’s subject to CAT at 33% and impacts on thresholds.
If it’s going to anyone else, it’s taxed as if it was distributed to the deceased ARF-holder (so income tax, USC, etc) and then the net proceeds are subject to CAT at 33% and thresholds etc.