Passing It On: Planning for Inheritance Tax
In Ireland, Capital Acquisitions Tax (CAT) applies to gifts and inheritances and is generally payable by the person receiving them. The current rate is 33% on the taxable amount above their available tax-free threshold, after allowing for relevant exemptions and reliefs. Earlier taxable gifts and inheritances within the same threshold group must also be taken into account.
How can inheritance tax be reduced?
Depending on your circumstances, planning opportunities may include:
- Reviewing reliefs for business and farming assets. Business Relief can reduce the taxable value of qualifying business property by 90%. Agricultural Relief can provide a similar reduction for qualifying agricultural property.
- Making use of the small gift exemption. Each person can receive gifts totalling up to €3,000 from any one individual each calendar year without paying CAT or using up their tax-free group threshold. This offers an opportunity to pass on wealth during your lifetime.
- Considering who should receive particular assets. Leaving assets to different family members may make use of their respective available thresholds. However, there are broader commercial considerations with respect to say a family business and who is best to take over running it.
- Looking at the wider tax position. Lifetime transfers of property or business assets can also trigger Capital Gains Tax and Stamp Duty. Retirement Relief/Entrepreneur Relief may reduce the Capital Gains Tax arising on a qualifying business or farm transfer, but it does not itself relieve the recipient’s CAT liability.
Any plan should also protect your own income, financial security and wishes for the business.
When should tax planning begin?
It is worth starting the conversation well before you intend to transfer assets.
For example, Business Relief normally requires a minimum ownership period of two years for an inheritance taken on death, compared with five years for a lifetime gift, subject to exceptions. Business and Agricultural Relief also have conditions that apply after the transfer; relief can be withdrawn if those conditions are not met.
An early review gives you time to consider your options, discuss succession with your family and coordinate your tax planning with your solicitor’s advice on your will.
How can TaxAssist help with inheritance tax planning?
TaxAssist’s tax planning team can review your assets, existing arrangements and wishes for passing on your wealth, and assess the potential inheritance tax exposure. We will consider available reliefs and other taxes that could arise and explain the tax issues to discuss with your solicitor when preparing or updating your will. You will receive a detailed written report and a follow-up meeting to discuss a practical plan tailored to your circumstances. Contact us to discuss your inheritance and business succession plans.
Need help with succession planning?
Contact TaxAssist Accountants for a free, no-obligation consultation to get a fixed fee quote
Or contact usLast updated: 21st October 2026