In the last few decades, Irish citizens have gained more wealth than we could have anticipated, meaning that planning for inheritance, both what we may receive and what we’ll pass on, has become a crucial element of financial planning in Ireland and knowing the basics of inheritance planning is of much greater importance than before.
It’s an era of financial planning that is often neglected, but some of the reasons why you should have the conversation include minimising tax liabilities and ensuring your assets, including family homes, farms, and businesses are passed on according to your wishes. Whether you’re considering retirement planning, protecting your family wealth, or avoiding intestacy issues, it’s essential to understand the intricacies of Inheritance Tax (IHT) and Capital Acquisitions Tax (CAT) in Ireland. And to understand the implications of not planning and how it affects your assets and money, and causes uncertainty for family members.
Minimize Inheritance Tax and CAT Liabilities
In Ireland, inheritance is subject to Capital Acquisitions Tax (CAT), which can impose a 33% tax on amounts exceeding certain thresholds. These thresholds vary based on the relationship to the deceased. Proper inheritance planning can help you reduce the CAT liability for your heirs, especially when passing on significant assets like a family home, farm, or family business. By strategically planning your estate, you can utilize tax-eficient methods such as lifetime gifts, trusts, and proper utilization of tax-free thresholds to minimize the impact of CAT on your beneficiaries.Â
CAT Group Thresholds | ||
---|---|---|
Group | Limit | Relationship |
A | €400,000 | Child or Grandchild if your parents died and you are under 18 |
B | €40,000 | Brother or Sister, Grandparent or Grandchild, Niece or Nephew or equivalent relationship |
C | €20,000 | Any other relationship |
Any amount passed on above these limits is taxed at 33% |

Avoid Intestacy and Ensure Your Wishes Are Respected
Dying without a valid Will in Ireland-known as intestacy-can lead to your estate being distributed according to the Succession Act 1965, which may not align with your personal wishes. Intestacy can create complications, particularly when dealing with complex assets like family farms or businesses. A well-drafted Will ensures that your assets are distributed as you intend, reducing the risk of disputes and ensuring that your family is provided for according to your desires.Â
Protect Family Wealth Across Generations
Effective inheritance planning is key to protecting family wealth and ensuring its smooth transfer across generations. This is particularly important when dealing with assets such as farms and family businesses. Without proper planning, these valuable assets could be at risk due to poor management or financial missteps by the next generation. By establishing trusts or other legal structures, you can control how and when your beneficiaries receive their inheritance, safeguarding your family’s wealth.Â

Streamline the Passing of a Family Home or Farm
Passing on a family home or farm requires careful planning to avoid unnecessary taxes and legal issues. In Ireland, specific reliefs are available for the transfer of agricultural property and family homes, but these need to be correctly utilised within your estate plan to be effective.
Planning ahead ensures that your heirs can benefit from these reliefs and continue to manage or reside in the family property without facing prohibitive tax bills.

Integrate Pensions into Your Estate Planning
Your pension can be a valuable part of your inheritance plan. In Ireland, pensions can sometimes be passed on to your heirs with favorable tax treatment, but again like other assets this requires careful planning. By integrating your pension into your broader estate plan, you can optimize the financial benefits for your beneficiaries, ensuring that your retirement savings are used in the most tax-efficient way possible.Â


Respect Legal Obligations and Address Potential Challenges
Irish law provides certain rights to spouses and, in some cases, children. For instance, a spouse is entitled to a legal right share of the estate, which cannot be overridden by a Will. If not addressed properly, these legal obligations can lead to disputes or even legal challenges.
Proper estate planning helps you respect these obligations while still achieving your overall inheritance goals. It also helps you anticipate and address any potential challenges, such as those that might arise if a child feels inadequately provided for.Â
Achieve Your Philanthropic Goals While Minimizing Tax Impact
If you have charitable intentions, you can structure your estate plan to include philanthropic goals. This not only fulfils your desire to support causes you care about but can also provide tax benefits, reducing the overall tax burden on your estate and maximizing the inheritance passed on to your family.Â