Inheritance tax changes under consideration ahead of Budget 2027 amid fairness concerns

Significant changes to inheritance tax are being considered by the Government ahead of Budget 2027, with discussions underway around possible increases to existing thresholds.

The Taoiseach has said he is very conscious of concerns around the current system, particularly for people without children who wish to leave an inheritance to nieces, nephews or other relatives. Micheál Martin said the issue will be examined further in the context of the upcoming Budget, noting the financial implications involved.

It comes as proposals are being examined within Government to increase the main inheritance tax threshold above €400,000 for children, alongside wider potential reforms to Capital Acquisitions Tax.

The issue has been raised repeatedly in the Dáil, with some TDs describing the current system as unfair, particularly in cases where people without children face different tax treatment when passing on estates.

Fianna Fáil and Fine Gael both made commitments in their election manifestos to review inheritance tax thresholds, with proposals including increases across all main tax categories in line with rising property prices.

The Tax Strategy Group has also previously suggested reforms such as allowing “chosen relationship” provisions, which could enable people without children to nominate heirs in a similar way to family beneficiaries.

A number of senior figures across Government have indicated that inheritance tax is now firmly on the agenda for Budget 2027, with discussions continuing in the coming weeks.