There is to be a renewed push by Independent ministers for changes to inheritance tax thresholds in Budget 2027.
Minister of State for Transport Seán Canney has said people “probably have been discriminated against” by the current Capital Acquisitions Tax (Cat) regime and “we need to have a look at that”.
His remarks come after correspondence released under the Freedom of Information Act shows that he told Minister for Finance Simon Harris he would raise inheritance tax thresholds with him.
In an email to Harris, Canney highlighted the case of a woman who sought to split her estate between her children and an adult grandchild whose father had died.
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The woman died in 2024 when the tax-free threshold that applied to that grandchild stood at €32,500. Her own children would have been able to inherit much more tax-free.
Canny’s email indicated that the family knew it was too late for anything to change for them. But they were “wondering if the Government can make any exceptions around this for future cases”.
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Harris wrote back to Canney, saying the proposal “will be considered as part of our annual review of Capital Acquisitions Tax”.
Cat, commonly known as inheritance tax, applies at a rate of 33 per cent on gifts or inheritances above tax-free thresholds that depend on the beneficiary’s relationship to the person who leaves them a bequest.
Children inheriting from a parent can receive up to €400,000 tax-free – a threshold introduced in Budget 2025.
A grandchild under the age of 18 – whose own parent has died – can also inherit up to €400,000 tax free from a grandparent.
Other relatives – including all grandchildren aged over 18 – are in a category where the tax-free threshold is now €40,000 (up from €32,500 after Budget 2025).
The Irish Times reported last year that Independent Ministers Michael Healy-Rae and Marian Harkin pushed for changes to the inheritance tax system for the beneficiaries of estates left by people with no children. There were no changes made to Cat in the last budget.
Canney said in the past week: “We’ll be looking to see if we can get something done on it [inheritance tax thresholds] in this year’s budget”, while saying it is “too early” to set out the scale of any increases to thresholds that should happen.
Harris’ spokesman said Cat was reviewed last year as part of the Tax Strategy Group process and “options were set out for broadening its scope”. This year’s Tax Strategy Group exercise, carried out by Government officials, “will further consider the matter”.
He added that Harris “recognises the burden of capital taxes and, as with all taxes, is keeping this matter under review”.
Any potential changes to the Capital Acquisitions Tax regime will be a decision for Harris, “as part of the budget process”.
