CHANGES TO CAPITAL ACQUISITIONS TAX IN BUDGET 2027

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Budget 2027 Changes

 

The Government announced the Budget for 2027 on Tuesday 6th October 2026. This article outlines changes to the Capital Acquisitions Tax (“CAT”) Categories, agricultural relief and business relief.

 

Budget 2027 Changes to CAT Categories

 

Please see below the following changes to CAT Categories from the 2027 Budget announcement:

 

  • Category A (i.e. children of the deceased parents) gift above €3,000 and / or inheritance:
    • Budget 2027 Category A €420,000 tax free.
    • The change to Category A is an additional €20,000 tax free if you are a child of the deceased.
    • Previously, it was €400,000 tax free.

 

  • Category B (i.e. close blood relatives – grandchild, great-grandchild, niece or nephew) gift above €3,000 and / or inheritance:

 

  • Budget 2027 Category B €44,000 tax free.
  • The change to Category B is an additional €4,000 tax free if you are a close relative of the deceased.
  • Previously, it was €40,000 tax free.

 

  • Category C (i.e. all other gifts / inheritances) gifts above €3,000 and / or inheritance:

 

  • Budget 2027 Category C €22,000 tax free.
  • The change to Category C is an additional €2,000 tax free for all other gifts or inheritances.
  • Previously, it was €20,000 tax free.

 

These three thresholds do not apply to gifts under €3,000 which is called the small gift exemption.

 

There have been no changes to bridge the gap between Category A and Category B despite calls for reform. A growing lobby has argued that people with no children are discriminated against under the CAT Tax free thresholds as it strongly favours children.  The government should consider allowing a person without children to select a relative or friend whom they could appoint as their “main successor” and allow them to avail of the Group A threshold, which would go some way towards bridging the imbalance in the inheritance tax regime between those with or without children.

 

Budget 2027 Changes to Agricultural Relief

 

Agricultural relief is an extremely important relief.  If applicable it can provide relief of up to 90% on gifts or inheritance of qualifying agricultural land and property.

 

Please see below the following changes to agricultural relief from the 2027 Budget announcement:

 

  • €15 million announced to support rural pubs.
  • Wear and Tear Allowance for Farm Safety Equipment extended by three years to December 2029.
  • An additional €31million allocated for new fertiliser scheme.
  • The fuel income support for farmers also extended for a further five months at a cost of €31.2million.

Budget 2027 Changes to Agricultural Relief (continued)

 

  • The Government removed the three-year holding period on applications made from next January 2027 for Succession Farm Partnerships.
  • The tax credit for Succession Farm Partnerships will be doubled to €10,000 from next year.

 

Budget 2027 – No Changes to Business Relief

 

Business relief may apply where you inherit or receive a gift of business property. Business relief has the effect of reducing the value of certain qualifying trading business assets by 90% for CAT purposes. This means that a significant amount of property could qualify as exempt from CAT. Where tax applies, the rate is effectively reduced from 33% to 3.3%. There are no changes to this type of relief in Budget 2027.

 

In the event you have any queries on the above or any other Probate query our Private Client Team would be delighted to assist you.  Please contact Head of our Private Client Department, Des Lynch at dl@ofx.ie or 021 – 4277788 with any queries.