Dáil Éireann Debate, Tuesday - 28 July 2026
792. Deputy Michael Cahill asked the Tánaiste and Minister for Finance to reform the inequity of the inheritance tax system, to address the anomalies that exist and ensure equality for all families and loved ones of childless citizens, if he will address the discrimination that currently exists in relation to inheritance tax; and if he will make a statement on the matter. [57404/26]
View answerCapital Acquisitions Tax (CAT) is a tax which applies to both gifts and inheritances and is charged at a rate of 33 per cent. For CAT purposes, the relationship between the person giving a gift or inheritance and the person who receives it determines the maximum amount, known as the “Group threshold”, below which CAT does not arise. The group thresholds were most recently increased in Budget 2025 as follows:
The Group A threshold increased to €400,000 from €335,000. This threshold applies where the beneficiary is a child of the disponer. This includes adopted children, stepchildren and some foster children. Parents may also fall within this threshold where they take an inheritance from a child.
The Group B threshold increased to €40,000 from €32,500. This threshold applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer. Following recent changes made to Capital Acquisitions Tax legislation, the Group B threshold also applies to persons who receive gifts and inheritances from the wider family of their foster parents, for example, from their foster siblings, uncles, aunts and grandparents.
The Group C threshold increased to €20,000 from €16,250, with this threshold applying in all other cases.
The Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides for a number of exemptions wherein no charge to CAT arises in respect of certain types of gifts and inheritances if certain conditions are met. For example, section 86 CATCA 2003 provides for an exemption from CAT on the inheritance of a dwelling house. To qualify for the exemption, the beneficiary (in this case the surviving cohabitant) must not have a beneficial interest in any other dwelling house at the date of the inheritance.
Additionally, the inherited property must have been the disponer’s (in this case the deceased person’s) principal private residence at the date of their death and the beneficiary must have lived in the property for 3 years prior to the date of inheritance. The beneficiary must continue to live in the property for 6 years after that date. Detailed guidance on the dwelling house exemption has been published on the Revenue website at www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/dwelling-house/index.aspx.
There is a significant cost associated with wholesale changes to the inheritance tax system i.e. increasing thresholds, reducing the CAT rate or altering how it operates. Department of Finance officials produced a Tax Strategy Group (TSG) paper last year that examined CAT policy options and have done so again in this year’s TSG papers. As the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
