There have been recent media reports that there will be a likely increase in CAT or a tweak of CAT coming in the next budget. There could well be tax planning opportunities for your clients in this. You may recall the mantra from the last recession, “its never been cheaper to pass down wealth”. This was due to the depressed value of property related assets after the last crash. Similar opportunities may now exist. I would encourage you to think about this and your clients and whether now could be a time to re-engage with them. It is difficult to see where the changes could be made on CAT but the obvious ones are reducing the thresholds down and increasing the rate. Reliefs are generally now monitored to an inch of their life and I can see no change to agricultural relief, business relief or the like. Dwelling house relief could come under examination. One very generous relief is that of s.79 CATCA; that is where a parent takes a child’s estate totally tax free, as long as the parent has made a non-exempt gift within 5 years of the death of the child.

But really all of this is in my view tinkering around the edges. From media reports the deficit that the government will run this year will be significant. It could be as high as €30 billion. To put this in context. The total tax take in 2019 was €59 billion. And to put this in context, the total net cost of the bank bailout was about €46 billion.

Further context is also needed. It is worth noting the overall amount that CAT brings into the exchequer is relatively small. Of the overall tax intake, CAT brought in just over half a billion. Which is 0.84% of the overall tax take. The big hitting taxes are income tax (€22 billion), VAT (€15 billion) and corporation tax (€10 billion). So really, CAT is not going to fill the deficit. So us CAT lawyers really are not the masters of the universe we once thought! But we do deliver a lot of peace of mind across the country.