A Fine Gael TD has hinted that the budget next week could see the Government announce a cut to inheritance tax. 

According to a recent poll by Royal London Ireland, 83% support the idea that a family home should be exempt from inheritance tax, while 5% disagreed. 

Currently, anyone given money from their parents or grandparents can receive €400,000 tax free, while anything above that figure incurs Capital Acquisition Tax of 33%. 

On Newstalk Breakfast, Fine Gael TD Joe Neville described his party as “very focused” on CAP. 

 “Over the last number of years, we’ve looked at how we can increase the thresholds,” he said. 

“At the same time, because I’m on the Budgetary Oversight Committee, one of the key focuses has been that we do have a wide tax base. 

“Because we’re very conscious that corporation tax is a significant amount of our tax intake.” 

Homes for sale in Dublin. Picture by: Leah Farrell / RollingNews.ie.

However, the Kildare North TD said that “all taxes have to be looked at” and acknowledged the strength of feeling about inheritance tax within society. 

“This survey does reflect that four out of five people do actually believe that family homes should be exempt from inheritance tax,” he said. 

“I’m not saying that inheritance tax should be done away with, but at the same time what we should ensure is that thresholds do keep a relative pace with how houses [are increasing in price].” 

Deputy Neville added that €400,000 is a “lot of money” but that house prices have surged in recent years. 

“Thresholds [were] significantly high back in the early 2000s,” he said. 

“What Fine Gael have put forward in their manifesto would be to increase the threshold to €500,000 in the lifetime of this Government.” 

'Very dangerous'

Also on the programme, Assistant Professor of Economics at Trinity College Barra Roantree noted that very few people actually pay inheritance tax. 

“What that survey shows is that people don’t really understand the system that we have,” he said. 

“The system that we have and often refer to as inheritance tax often applies to both gifts received over life and then inheritances and bequests received when someone dies. 

“Very few people pay it; the reason for that is most inheritances, most gifts are from parents to kids. 

“And there’s a threshold of €400,000 tax free that you can get over your lifetime - including bequests. 

“On average, people who inherit something get €100,000, so the threshold to start paying tax is four times what the average amount received is.” 

Professor Roantree added that it would be “misguided” to cut inheritance tax, given the State’s reliance on corporation tax receipts. 

“We’re being told there will be no space for personal income tax cuts in the next budget and at a time when we’re being told that our tax base is increasingly reliant on corporation tax, the idea that we would erode further the revenues from inheritance tax, I think is very dangerous and would be unwise,” he said. 

Budget 2026 will be delivered on Tuesday.

Main image: A split of Budget 2025 and a euro cash. Pictures by: RollingNews and Alamy.com.