Inheritance tax failed to feature in Budget 2026. But that hasn’t dampened the enthusiasm of an increasingly vociferous campaign that insists Ireland’s inheritance tax regime is unfair.
Their basic argument is that people who do not have children are discriminated against by virtue of the €400,000 tax-free allowance granted to children inheriting from their parents. People without children cannot avail of this allowance and their beneficiaries are limited to a maximum tax-free threshold of €40,000 if they are close blood relatives, or €20,000 otherwise.
They maintain the tax is based on marriage which, they say, is no longer sustainable. As such, they say it is unconstitutional and also against the European Convention on Human Rights.
It is true the provision that allows spouses to inherit or receive assets without limit from each other is related to marriage but the tax is otherwise based on bloodline, not marriage – including the €400,000 tax-free exemption for children. If there is to be reform, it will likely see long-term unmarried partners allowed to benefit from the spousal provision.
READ MORE
Across Europe, giving spouses and children preferential treatment is not unusual. It is common to all major European Union states that have an inheritance tax. None operates as the “childless” campaign would suggest.
Ireland’s inheritance tax regime may be more favourable in the scale to which children benefit compared to others, driven by the Irish obsession with keeping the family home or, more critically, land in the family across generations. It is one that has been supported by governments over decades.
The sense of entitlement that people should be allowed to pass on their wealth free of tax because it has already been taxed on accumulation is misplaced. There is no such right, nor is there any particularly strong argument for one.
People are free to enjoy the wealth they have created and paid tax on. Those who inherit have done nothing to create that wealth and it is perfectly reasonable for a government to decide that the wealth should be taxed on generational transfer.
Favouring close family is not a “right” but a political decision, one that the evidence says is common across Europe. That does not make it discriminatory.
