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Minister for Finance Jack Chambers has said the Government will not equalise the inheritance tax thresholds for children and nieces/nephews due to the cost, but will consider broader adjustments within available resources. He also announced plans for a new debt issuance agency and reiterated the commitment to moderate tax cuts and infrastructure investment in the upcoming budget.
Currently anyone can inherit €400,000 from their parents but if an aunt or uncle wants to give their niece or nephew a gift or an inheritance, the tax free threshold is just €40,000, after which it is subject to a capital acquisitions tax of 33 per cent.
"I acknowledge there is a significant campaign around this which is concentrated on Category B," Chambers told the Dublin Economics Workshop (DEW) event in Wexford. The Category A threshold governs inheritances received by children while Category B covers inheritances received by siblings, nieces, nephews and grandchildren.
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"We have discussed, and are considering, broader adjustments to inheritance tax across different categories but it will be within what's available," he said. "It's about using a number of budgets to make a difference on this but across different categories so we're not solely focused on Category B," he said. "The tax expenditure cost of every €5,000-€10,000 (change to the thresholds) is very significant, so we have to be honest about what's available when we're prioritising income tax," he said.
Chambers again played down expectations of a big tax giveaway in next month's budget, suggesting the tax package would be "moderate overall".
"The Government would like to prioritise a series of modest adjustments to income tax over the next number of years," he said. Minister for Finance Simon Harris told RTÉ earlier that the Government was committed to increasing the threshold at which workers pay the higher rate of income tax in each of the next four budgets. Harris has in recent days said middle-income earners would benefit significantly from the tax changes while Chambers has tried to manage expectations.
"We should use successive budgets to try and reward work and support workers across the economy and to ensure the cumulative impact of that really makes a difference to workers over the next number of years," Chambers said.would change the budgetary arithmetic, Chambers said the Government would use the social protection system to protect lower income groups from the current squeeze onIn his address to the workshop, Chambers said the Government's new Accelerating Infrastructure Taskforce was already increasing the "delivery rate". Next month's budget would prioritise capital investment to deliver "critical infrastructure" while moderating the rate of growth in current spending.
The rapid rise in public spending - it jumped by 54 per cent between 2019 and 2025 - has become a big flashpoint for the Government. Chambers has promised a "fundamental change" in budgeting and has warned departments they will face greater sanctions for breaching their spending allocations. The Government's new Medium Term Fiscal and Structural Plan pledges to limit the annual increase in public spending to 6 per cent a year for the next five budgets.
The annual increase in spending will taper from 7.2 per cent this year to 5.4 per cent in 2029 and 5.2 per cent in 2030, equating to average annual increase over the period of 6 per cent. Under the plan, Chambers told the conference that the total Government expenditure ceiling would increase from €109.9 billion in 2025 to €147.3 billion in 2030.
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