Budget 2025: Everything you need to know about the inheritance tax cut which comes into effect today
The charge on inheritances is a form of capital acquisitions tax. In reality, however, this is an inheritance and gift tax as it applies to wealth transfers in the lifetime of the disponer – the person who ultimately gives the inheritance – and from the disponer’s eventual estate. This means large gifts made before the donor’s death are classed as inheritances.
The cuts take force today, at an annual cost to the Government of €88 million. The main change increases the threshold at which the tax imposed on large gifts and inheritances from a parent to a child. In tax parlance, this is known as category A. As was widely leaked in the advance of budget day, the category A threshold rises to €400,000 from €335,000 previously. This basically means people can inherit an additional €65,000 from a parent tax-free – the first rise in the threshold since 2019.
”. The new cut did little to appease Shatter, who said the current regime remains on a fiscal emergency footing. “In a State that exempts substantial lottery and gambling wins from taxation, it seems that winning money on a flutter is perceived by Government as more beneficial to society and the State than the simple generosity of those deceased and their concern for the welfare and financial security of others,” he said.
Inheritance Inheritance-Tax Alan-Shatter Paul-Murphy Thomas-Pringle
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