Budget 2027 saw the thresholds for inheritance tax increase slightly, which could see the small number of individuals who pay the tax save thousands. 

Currently, any child who inherits from their parent pays inheritance tax - or Capital Acquisitions Tax (CAT) - of 33% on any sum above a threshold of €400,000. 

On The Claire Byrne Show, chartered tax adviser Owen Burke said the threshold will go up in January by a “little, not a huge amount”. 

“You can now leave €420,000 to each of your children [taxfree],” he explained. 

“For nieces, nephews, siblings, that's Group B, that increased by €4,000 to €44,000 - not very much.

“Then for everyone else, if you're not related, that only went up by €2,000 to €22,000.” 

Mr Burke continued that this is a particular issue for people who are cohabiting with a loved one, whether that is a close friend or a partner. 

“They're not married, they're not siblings, obviously, and they fall into that,” he said. 

“So, they have a very small tax-free threshold to inherit from somebody that might be leaving them money.” 

Advice

One texter asked whether he and his new wife need to update their wills, to simplify the transfer of assets to their adult children when they die. 

“Absolutely, they should look at amending their wills,” he urged. 

“I'm assuming it's a man, I'll just say, who has children from his first marriage.

“His children have no automatic entitlement to inherit from his new wife's property.

“However, she can leave them property under her will and for tax purposes, they're treated as children.”

Main image: Hands of an elderly pensioner holding a leather wallet. Picture by: Alamy.com