Dáil Éireann Debate, Wednesday - 30 September 2026
28. Deputy Michael Cahill asked the Tánaiste and Minister for Finance to address discriminatory issues regarding inheritance tax in Budget 2027 (details supplied); and if he will make a statement on the matter. [69066/26]
Amharc ar fhreagraCapital 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.
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 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.
