Michael Cahill
Ceist:271. Deputy Michael Cahill asked the Tánaiste and Minister for Finance to consider reducing inheritance tax and ultimately phasing it out; and if he will make a statement on the matter. [54485/26]
Amharc ar fhreagraThursday, 16 July 2026
Ceisteanna (271)
Freagraí scríofa
Capital 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. Broadly, this threshold applies where the beneficiary is a child of the disponer.
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.
The Group C threshold increased to €20,000 from €16,250, with this threshold applying in all other cases.
Along with tax free group thresholds, various reliefs and exemptions are available in relation to CAT, including agricultural relief, business relief, the small gift exemption, favourite niece or nephew relief, and the dwelling house exemption. It is important from a tax policy perspective to maintain stability and certainty, and to ensure that the CAT thresholds are appropriately set in the context of the range of reliefs available.
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 years TSG papers which will be published shortly.
I recognise the burden of this tax, in that regard, you should note that the CAT group thresholds are kept under review annually throughout the Finance Bill cycle. However, 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.