Ireland’s tax authority has updated its Capital Acquisitions Tax manual to reflect the higher tax-free thresholds announced in Budget 2027, which apply to gifts and inheritances taken on or after 7 October 2026.
Ireland’s tax authority (Revenue) has updated its Capital Acquisitions Tax (CAT) manual to reflect the increased group thresholds announced in Budget 2027, according to Revenue eBrief No. 149/26, published on 12 October 2026.
The updated guidance, CAT Manual – Sch. 2: Computation of Tax: Part 1 – Preliminary, explains how the group thresholds operate. These are the tax-free limits below which CAT does not arise. They are set out in Part 1 of Schedule 2 to the Capital Acquisitions Tax Consolidation Act (CATCA) 2003.
The increased thresholds apply to gifts and inheritances taken on or after 7 October 2026. The previous thresholds continue to apply to those taken before that date.
New thresholds
Under paragraph 1 of Part 1 of Schedule 2, the group threshold depends on the relationship between the beneficiary and the disponer, the person providing the gift or inheritance.
- Group A: EUR 420,000, up from EUR 400,000. This applies where the beneficiary is, among others, a child of the disponer, or a parent of the disponer who takes an absolute inheritance from a child.
- Group B: EUR 44,000, up from EUR 40,000. This applies where the beneficiary is, among others, a brother, sister, nephew, niece, or lineal ancestor or lineal descendant of the disponer.
- Group C: EUR 22,000, up from EUR 20,000. This applies in any other case.
Stepchildren and surviving spouses
Under section 2 of CATCA 2003, a child includes a stepchild. The Group A threshold therefore applies to a stepchild and to a minor child of a deceased stepchild. If a child of a deceased stepchild is not a minor, the Group B threshold applies.
Paragraph 6 of Part 1 of Schedule 2 covers cases where the donee or successor is the surviving spouse or civil partner of a deceased person who, at the time of death, was of nearer relationship to the disponer. In such cases, that nearer relationship applies when computing the tax. This remains the case even if the surviving spouse or civil partner has remarried before the date of the gift or inheritance.
Further updates expected
Revenue said any other Tax and Duty Manual documents that need amending to reflect the Budget 2027 changes will be updated in due course.
The guidance is provided as a guide only. It is not professional advice, including legal advice, and should not be assumed to be comprehensive or to give a definitive answer in every case. It should be read together with section 2 of, and Schedule 2 to, CATCA 2003.
