Ireland Increases Inheritance Tax Thresholds in Budget 2027

Taoiseach Simon Harris announced increases to all three Capital Acquisitions Tax (CAT) thresholds as part of Budget 2027. Starting next year, the tax-free threshold for Category A, primarily children inheriting from parents, will rise from €400,000 to €420,000. Category B, covering close blood relatives such as siblings and grandparents, increases from €40,000 to €44,000, while Category C, covering non-relatives, moves from €20,000 to €22,000.

These thresholds apply to gifts exceeding the €3,000 annual small gift exemption, and amounts above the new limits remain subject to a 33 per cent tax rate. The Government rejected calls to lower this tax rate or equalize thresholds between categories. Minister for Public Expenditure Jack Chambers stated that equalizing Category A and B thresholds would cost hundreds of millions of euro, an amount he said is unavailable in the current tax package.

The measures follow data from the Parliamentary Budget Office showing that CAT collections reached €1.1 billion in 2025. Residents of Dublin accounted for more than half of those total collections.