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Inheritance tax is a tax of 33% on gifts and inheritances which kicks in at a particular limit. Shutterstock/New Africa

Where do the main parties (and former minister Alan Shatter) stand on inheritance tax?

In the recent Budget, the inheritance tax threshold was increase for the first time since 2019.

DURING THE RECENT Budget, the inheritance tax threshold was hiked up significantly in what was the first major change in five years.

Making the announcement in the Budget speech, Finance Minister Jack Chambers said it was “appropriate” to make the first increase in the rate since 2019 given the increase in property values since then.

Inheritance tax, technically known as the Capital Acquisitions Tax, is a tax of 33% on gifts and inheritances which kicks in at a particular limit.

It does not have to be paid if the inheritance does not reach this limit.

Inheritance from a parent to a child (including adopted or stepchildren) is counted as a “Group A” inheritance.

Within this group, the inheritance tax limit increased from €335,000 to €400,000.

Close to 97% of people will be unaffected by this tax change. 

The Group B category limits also increased from €32,500 to €40,000 – this category includes siblings and nieces or nephews.

Within the third, Group C category – which is any relationship not covered by the first two categories – the threshold was increased from €16,250 to €20,000.

So with political parties making all types of pledges and promises in the run up to the general election, have they been saying anything on inheritance tax?

Fine Gael

In its manifesto, Fine Gael said it “acknowledges the principle of inheritance tax but recognises that the burden of capital taxation has increased significantly over the past 15 years”.

The party said Ireland generates “above-average revenue from inheritance and gift taxes” and added that “recent fiscal drag has further cut the thresholds in real terms”.

The party has pledged to “build on progress made in Budget 2025” by increasing the inheritance tax threshold by raising the Group A threshold to €500,000, Group B to €75,000, and Group C to €50,000.

A spokesperson for Fine Gael told The Journal that the party is also “committed to reviewing the composition of the groups where the deceased does not have children”.  

“In contrast, Fianna Fáil give few clear commitments in relation to their inheritance tax reforms,” said the spokesperson.

“While Sinn Fein commits to reforming Capital Acquisitions Tax as a revenue raising measure.”

Fianna Fáil

Meanwhile, a Fianna Fáil spokesperson said the party “understands the imposition on people who inherit homes or farms due to the current threshold for inheritance tax”. 

In a statement to The Journal, a spokesperson said inheritance tax rates “need to take property values into account”.

While the party noted increases in Budget 2025, it added that the “current thresholds are still lower than what they were in 2008”.

Inheritance tax is a tax of 33% on gifts and inheritances which kicks in at a particular limit, and Tánaiste and Fianna Fáil leader Micheál is in favour of reducing this rate from 33% to 25%

The spokesperson added that the party is “conscious too of the very low thresholds when the deceased is childless”  and will review this threshold – this Group C threshold is currently €20,000.

While no figures have been provided, Fianna Fáil’s manifesto pledges to “increase and adjust the inheritance tax thresholds in each budget to reflect the wider increase in property prices in the Irish economy in recent years”.

Sinn Féin

A spokesperson for Sinn Féin told The Journal that the party believes in a “tax system that is fair” and remarked that inheritance tax is an “important tool to tackle inequality and invest in public services to deliver a fair society”.

The party would revert the inheritance tax thresholds to pre-Budget 2025 levels and increase the rate from 33% to 36% – Sinn Féin say this would raise €143 million annually.

“We believe that people’s family homes are not the same as other forms of wealth – and shouldn’t be treated in the same way,” said the spokesperson.

“This is why we oppose the local property tax on family homes – and why we outlined our plan explaining how that could be abolished.”

Alan Shatter

Alan Shatter is a former Fine Gael TD and previously served, simultaneously, as Minister for Justice and Minister for Defence.

He is contesting the general election as an independent candidate in Dublin Rathdown and is chair of the Inheritance Tax Reform Campaign.

Shatter held public meetings and ran a campaign in the run up to Budget 2025 calling for an end to inheritance tax, which he claims is a “jealousy or resentment tax”.

In a statement to The Journal, he further described inheritance tax as “state sponsored grave robbery and double taxation”.

He added that it “forces the sale of modest sized homes that could provide home security for a bereaved child or grandchild and their family”.

Shatter said Sinn Féin’s “opposition to the property tax on homes while favouring the forced sale of homes to pay increased inheritance tax is bereft of any logical insight”.

Meanwhile, he noted that both Fine Gael and Fianna Fáil intend to retain the tax.

“Fine Gael has recycled an unimplemented promise first made during the 2016 general election that lacks any time frame for implementation,” said Shatter.

He added that Fianna Fáil has a “number of meaningless promises, including a pledge at some unspecified date to reduce the tax rate to 25%”.

“Should all their promises be implemented, the tax will still remain more draconian than it was 16 years ago, when the rate was 20%, and taking account of both the increase in the consumer price index and property values, the thresholds were higher.”

He added: “For example, up to 2008 a child could inherit a home from a parent up to a value of €542,000 without any inheritance tax hit”.

That sum would be equivalent to around €675,000 today, according to the Central Statistics Office.

“None of the Dáil parties yet get the extent of the public anger the tax generates,” said Shatter, “it should be abolished.”

Green Party

Meanwhile, the Green Party said in a statement to The Journal that it would “prioritise increasing income tax bands and income tax credits to ensure the largest number of people possible benefit from any money that is set aside for tax reduction”.

In its manifesto, the party says it will exclude “wealthy farmers and business owners from agricultural and business relief”.

“Agricultural and Business relief from inheritance tax subsidised fewer than 2,500 people to the tune of over €400 million last year – a subsidy of almost €170,000 per claimant in one year alone,” the party said in its manifesto.

It added: “ESRI research has highlighted that these claimants tend not to be owners of small family farms and businesses – some of whom are currently struggling to stay afloat – but owners of larger enterprises.

“We would restrict this relief to assets worth three times the value of the average farm.”

Labour Party

In a statement to The Journal, a Labour spokesperson said the party isn’t proposing “any specific changes on inheritance tax in our manifesto”.

The spokesperson said Labour will develop a “Spanish style net wealth tax with a 1% levy on assets worth over €2 million excluding (up to specified limits) the family home, pension assets and family businesses and farms”.

In its manifesto, Labour said it will “broaden the tax base with increased taxes on wealth, not income” via a “net wealth tax like the Spanish model”.

Social Democrats

A Social Democrats spokesperson noted that only around 3% of the population ever pay inheritance tax.

“It is only paid by a minority who inherit relatively large sums,” said the spokesperson.

The party spokesperson added that there is “no good reason to tax an inheritance, which is received by accident of birth, more favourably than productive activities like work”.

“In cases where a son or daughter is living in a home, which they have inherited from a parent, there is already a provision in law to facilitate inheritance tax being waived in certain circumstances,” said the spokesperson.

“For that reason, the Social Democrats do not favour any increase in the threshold at which inheritance tax is paid.”

And in its manifesto, that party said it would “examine the fairness and appropriateness of the current regimes around Business and Agricultural Relief” for inheritance tax.

Other parties

Aontú, Independent Ireland, People Before Profit, and Right to Change did not respond to The Journal when asked for comment.

None of the above listed parties include anything specific to inheritance tax in their general election manifestos. 

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31 Comments
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    Mute MN
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    Nov 27th 2024, 8:23 PM

    If Shatter says it’s good then you know it’s bad .

    226
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    Mute Freda Peeple
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    Nov 27th 2024, 6:28 PM

    Shatter doing his best to make sure his €10 million euro home is safe after he’s brown bread. Inheritance tax affects the wealthy. There are bigger things going on

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    Mute Alan
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    Nov 27th 2024, 7:05 PM

    @Freda Peeple: ironic that a firm supporter of Netanyahu discusses inheritance. Not a big issue in Gaza I would say.

    31
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    Mute Maximilian Kolbe
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    Nov 27th 2024, 7:42 PM

    @Alan: Well in case you didn’t know, Alan Shatter is a Jew and he also has Israeli citizenship.

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    Mute H Woo
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    Nov 27th 2024, 8:58 PM

    @Freda Peeple:
    If tax planning is good enough for the great socialist Tony Benn to protect the family wealth. It’s good enough for the rest of us to do the same.

    6
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    Mute lesidees
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    Nov 27th 2024, 6:57 PM

    Scrap inheritance tax and replace it with a wealth tax

    130
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    Mute Chaotic State
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    Nov 27th 2024, 6:31 PM

    Shatter has been the biggest supporter of the Israeli Apartheid government and their ongoing genocide in Gaza and ethnic cleansing of the West Bank
    He has been a fully paid up member the Israeli Hasbara in Ireland during his whole political career and despite anything he has said, it’s blatantly obvious that his sole purpose of running in the general election is the hope of having a disruptive influence on Ireland’s foreign policy in relation to the Israeli Apartheid government.

    155
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    Mute Maximilian Kolbe
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    Nov 27th 2024, 7:43 PM

    @Chaotic State: he’s a Jew sand has citizenship in Israel. Did you not know this?

    9
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    Mute offside again
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    Nov 27th 2024, 8:21 PM

    @Chaotic State: if you say so, it must be true.

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    Mute offside again
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    Nov 27th 2024, 8:21 PM

    @Maximilian Kolbe: so what.

    107
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    Mute Maximilian Kolbe
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    Nov 27th 2024, 8:42 PM

    @offside again: so why are you shocked that he is behaving like he is

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    Mute H Woo
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    Nov 27th 2024, 9:04 PM

    @Chaotic State:
    Care to share a link to your claim that that Shatter agrees with “genocide”

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    Mute Shane O Neill
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    Nov 27th 2024, 6:28 PM

    Why does Alan Shatter get a mention? No need for that.

    128
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    Mute Maximilian Kolbe
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    Nov 27th 2024, 6:29 PM

    @Shane O Neill: he paid them to get a mention.

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    Mute Frank Mc Carthy
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    Nov 27th 2024, 6:07 PM

    An issue that’ll only ever ‘possibly’affect 1 in every 33 citizens….. hardly game changing sound bites on the eve of an election

    117
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    Mute Injustice Cop
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    Nov 27th 2024, 10:07 PM

    I’m not against some inheritance tax yet at the rates I am seeing, I see the state’s snout in the through and with little provision made for those who were raised in non-standard family arrangements. Force families to sell homes despite being barely able to make ends meet. Not to mention doing this to people grieving their loved ones. Past a certain point, this tax is pure greed.

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    Mute Kevin O Brien
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    Nov 27th 2024, 7:12 PM

    Check out his Twitter and get educated

    111
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    Mute John Reynolds
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    Nov 27th 2024, 10:42 PM

    @Kevin O Brien: isreal and the Palestinians need to sought out their own problems we need to sought out ours simple really

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    Mute Thomas Berry
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    Nov 27th 2024, 6:30 PM

    Why are you giving a genocide apologist space?

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    Mute H Woo
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    Nov 27th 2024, 10:48 PM

    @Thomas Berry:
    Linky please

    2
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    Mute Kevin O Brien
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    Nov 27th 2024, 7:09 PM

    Ask him about his views on the daily Genocide of the Occupied persecuted Palestinians !

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    Mute offside again
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    Nov 27th 2024, 8:23 PM

    @Kevin O Brien: yawn

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    Mute H Woo
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    Nov 27th 2024, 9:07 PM

    @Kevin O Brien:
    HAMAS surrenders problem sorted.

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    Mute H Woo
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    Nov 27th 2024, 10:44 PM

    @Kevin O Brien:
    Why?
    We are talking about Irish tax.

    Palos are the pikies of the Arab world, Arabs want nothing to do with them and neither should we.

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    Mute H Woo
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    Nov 27th 2024, 10:46 PM

    @Kevin O Brien:
    They could always go back to Jordan

    4
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    Mute Frank O'Hara
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    Nov 27th 2024, 8:10 PM

    Alan Shatter is the only decent candidate running who actually has a track record of success. I’m lucky enough that he’s running in my constituency. Although he’s not perfect, at least he wants to abolish the inheritance tax, cut income and property taxes and supports increasing spending on national defence. He also wants to privatise certain services that the HSE offers instead of throwing more money at it and he is tough on crime and wants to hire more Gardaí which is certainly refreshing to hear. He’s also the only candidate running in my constituency that’s pro-Israel and pro-Ukraine. He’ll be getting my vote and not a single other person. We need some common sense and free-market policies in Dáil.

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    Mute thomas molloy
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    Nov 27th 2024, 6:14 PM

    Increasing the reasons to doss and do fa with your life is the negative behind taxes on taxed on taxed. But the greed of socialism is mindless.

    31
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    Mute Jack
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    Nov 27th 2024, 10:37 PM

    Anything immediate family related should be deemed owned and not subjected to inheritance tax.

    22
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    Mute Maximilian Kolbe
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    Nov 27th 2024, 6:29 PM

    Did Jack chambers actually say ‘the rate has to be increased because the prices have increased’.??? Does this lad not realise that a rate is a percentage of the price? If for example the rate is 33%, and the price is 100,000 then 33,000 is paid. If prices increase and is now 500,000, then 33% of that would be 165,000. How foolish is this man. Does he think that a fixed fee is paid? Does he not know how percentages work? Does he not realise that as prices increase, the amount paid will increase at the exact same rate?

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    Mute Joe McNamara
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    Nov 27th 2024, 7:30 PM

    @Maximilian Kolbe: I think he was referring to the thresholds.

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    Mute H Woo
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    Nov 27th 2024, 9:01 PM

    Interesting the rich kids of our cartoon left did not answer.
    I wonder why?

    10
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