Barry Ward
Ceist:165. Deputy Barry Ward asked the Tánaiste and Minister for Finance the position regarding a review of inheritance tax parameters; and if the existing relationship category thresholds can be reviewed. [68251/26]
Amharc ar fhreagraTuesday, 29 September 2026
Ceisteanna (165)
Freagraí scríofa
Capital Acquisitions Tax (CAT) is a tax which applies to both gifts and inheritances and is charged at a rate of 33%. 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. It is important to say that 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 generally 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.
My officials examined CAT as part of both last years and this year’s annual Tax Strategy Group exercise. The resultant papers outlined the tax policy considerations for the Government and the options available to it in forming a Budget. The Tax Strategy Group papers relating to CAT also examined a number of cost modelling exercises, including proposals to amend the Group B threshold parameters. They were published in advance of the Budget and are the best means of considering issues such as inheritance tax in an analytical and transparent way. As demonstrated by that exercise, there is a significant associated cost with further changes to the group thresholds. The Tax Strategy Group is not a decision-making body and the papers produced by my Department are simply a list of options and issues to be considered in the Budgetary process.
As with all taxation matters, CAT is kept under review. 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.