SIGNIFICANT INHERITANCE TAX changes are being considered by the government for budget 2027.
While the main priority of the budget for Fianna Fáil and Fine Gael is reducing income tax, sources in both parties said their leaders were have discussed inheritance tax being on the agenda at recent parliamentary party meetings
The Taoiseach was asked about the government’s plans in the Dáil on Wednesday, where he responded by saying he is “very conscious of the issue, particularly in regard to those without children”.
Micheál Martin said these people had “worked hard all their lives and want to leave an inheritance to nieces, nephews or family members”.
“We will examine this again the context of the budget to see what we can do, particularly on that issue of those without children and so on who want to leave an inheritance. The costs are significant as well,” he said.
The estates of people with no children was an issue raised by a number of TDs ahead of last year’s budget, however no action was taken.
The Tax Strategy Group, an expert advisory panel at the Department of Finance, noted in its 2025 papers that people who are not related could have “equally close and meaningful relationships similar to familial relationships”.
It outlined that ‘chosen relationship’ legislation could allow individuals with no children select one or two heirs to their estate under the same grouping as parent and child.
People without children
Fine Gael TD Brian Brennan told the Dáil on Wednesday that one million people in Ireland do not have children.
“That is for many reasons – maybe life choice, medical or simply their personal choice. Under the current inheritance tax threshold, if a parent leaves a property or investment, there is a threshold of €400,000 but if an aunt or uncle leaves their property or investment to their niece or nephew, their threshold is 10% of this amount.
“This is simply unfair and it is actually discriminating against people who do not have children,” he said.
He also highlighted that a change to thresholds is needed as property prices have increased significantly.
Both Fianna Fáil and Fine Gael made a number of pledges in their election manifestos around inheritance tax, also known as Capital Acquisitions Tax (CAT).
Fianna Fáil specifically pledged to review the inheritance tax thresholds applicable when the deceased does not have children.
The party also said it would increase and adjust the inheritance tax Category A, B and C thresholds in each budget “to reflect the wider increase in property prices in the Irish economy in recent years”.
Meanwhile, Fine Gael said it would increase Capital Acquisitions Tax thresholds and raise Group A threshold (for children) to €500,000, Group B (for siblings) to €75,000, and Group C (for others) to €50,000.
Threshold increases being considered
A source said the Tánaiste “understands the burden inheritance tax can place on families seeking to pass on a home or farm to the next generation”.
“He has consistently said there are fairness issues in the current system and that these deserve consideration.
“The Tánaiste has also said he wants to reduce the tax burden on all workers and has committed to introducing an income tax package.
“All of these matters will be carefully considered over the coming weeks,” they said.
Harris has previously stated that the thresholds are “unfair”.
Meanwhile, a senior Fianna Fáil source dismissed that idea that the two coalition parties are at odds on the issue and that Fianna Fáil are in favour of solely tackling the inheritance issue of those with no children over the threshold increases.
“We are all examining it to see what is possible,” they said.
A Fine Gael TD said “there’s no doubt about it” that inheritance tax is on the agenda, stating that it has been raised by Harris at the weekly parliamentary party meetings.
They said it is a priority issue for many party members, particularly raising the existing thresholds, and making changes to include those without children.