Budget 2027 introduced a number of measures aimed at easing the tax burden on individuals transferring wealth and assets, particularly in the context of family succession planning. The most notable changes were increases to Capital Acquisitions Tax (CAT) thresholds and a reduction in the Capital Gains Tax (CGT) rate.
Under the CAT regime, the tax-free lifetime thresholds were increased by approximately 5% for gifts and inheritances taken on or after 7 October 2026. The Group A threshold, which generally applies to gifts or inheritances received by children from their parents, increased from €400,000 to €420,000. The Group B threshold, which applies to certain close relatives such as siblings, nieces, nephews and grandchildren, rose from €40,000 to €44,000. The Group C threshold, which applies to all other beneficiaries, increased from €20,000 to €22,000. The CAT rate itself remains unchanged at 33%.
Alongside these changes, the Government reduced the standard CGT rate from 33% to 31% for disposals made on or after 7 October 2026.
The combined impact of the CAT and CGT changes is particularly relevant for family wealth transfers. For example, parents transferring assets to children can now pass a greater amount tax-free under the CAT regime, while any CGT arising on the disposal of those assets will be taxed at a lower rate.
While the reductions are relatively modest, they represent a positive development for succession planning and estate management. Individuals considering significant gifts, inheritances or asset transfers should review their arrangements to determine whether they can benefit from the revised thresholds and lower CGT rate.
If you would like advice on succession planning, or help with any other legal matter, please contact us here or email us at info@mcgrathmullan.ie.
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