Inheritance tax - Married Couple

Just to add, the husband will need to submit a CAT return as he has exceeded 80%of the relevant threshold.

Your understanding is correct. You can make gifts to your children wich go towards their lifteime threshold but, as long as the gifts don't take them over that threshhold, your children will have no CAT liablity.

As the inheritance you yourself have received is below the parent/child threshold, it follows that any gifts you make to your children out of your inheritance must also be below the parent/child threshold. The only way the gifts could incur a CAT liability is if your children have previously received gifts from you or their other parent and this latest gift, when aggregated with the earlier gift, exceeds the threshhold.

It's both parents - so if you received €100,000 from your mother followed sometime later by €300,000 from your father, you'd pay tax on €65,000 received from your father (€400,000 cumulatively received from your parents -€335000 exemption).

A gift will only fall under 1 threshold at a time and you don't pass the threshold, rather the gift is deemed as having come from the grandparent.

If you gift within 3 years, its considered as coming from grandparents and will reduce their Group B threshold accordingly. Group A will remain untouched in this scenario. This could actually be beneficial if there is nobody they will ever receive a gift or inheritance from in Group B which would otherwise go unused, since there is only a limited amount of people that call fall within Group B you may have a good idea of this.

If after 3 years, will be considered as coming from you and will reduce Group A threshold accordingly. Group B will remain untouched.