24/05/2026
For affluent Irish families, inheritance tax planning is no longer simply about passing on the family home. Increasingly, wealth is tied up in investment properties, trading businesses, overseas assets, and pension arrangements. As property values continue to rise faster than Capital Acquisitions Tax (CAT) thresholds, many families are finding that even relatively modest estates can create substantial tax liabilities for the next generation.
Today, CAT in Ireland applies at 33% on gifts and inheritances above the available thresholds. The current Group A threshold — generally applying from parent to child — is €400,000. While the Government has gradually increased these thresholds in recent years, property inflation has significantly outpaced those increases.
Consider a family with two children, three Dublin investment properties, a trading company, and some overseas assets. A property portfolio worth €3 million today may have been worth half that amount 10–15 years ago.
This creates a growing problem particularly for families with fewer children. Historically, larger families naturally spread inherited wealth across multiple beneficiaries, helping maximise available tax-free thresholds. However, where a couple has only one or two children, the concentration of wealth per beneficiary becomes much higher.
For example:
A €4 million estate divided between four children may create manageable CAT exposure.
The same estate divided between two children dramatically increases the taxable inheritance per child.
Even after applying the current €400,000 threshold, each child could still face a very significant CAT liability at 33%.
Many families also underestimate the complexity created by overseas assets. Foreign property, investment accounts, or business interests may create exposure not only to Irish CAT, but potentially foreign inheritance taxes, local probate rules, or Capital Gains Tax (CGT) complications. Double taxation relief may apply in certain circumstances, but cross-border succession planning requires careful coordination between Irish and foreign tax advisers.
The interaction between CAT and CGT is particularly important where appreciating assets such as property or shares are involved. While CAT applies to the beneficiary, CGT may also arise on disposals either before or after succession. Poorly timed transfers can unintentionally trigger tax charges that could otherwise have been mitigated through structured planning.
One area often overlooked by property-focused families is the strategic value of pension assets.
Many Irish investors instinctively prioritise property acquisition as the core of their long-term wealth strategy. Property is tangible, familiar, and historically has performed strongly in Ireland. However, from an estate planning perspective, pensions can offer substantially more favourable tax treatment than directly held property.
Unlike investment properties, pension assets may in certain circumstances pass outside the estate for probate purposes and can often be transferred more tax efficiently to spouses or dependent beneficiaries. Approved Retirement Funds (ARFs), for example, can provide far more flexible succession options than directly inherited real estate.
By contrast, inherited property typically creates multiple layers of taxation exposure:
CAT on inheritance
Potential CGT on future disposal
Stamp duty costs on acquisition
Ongoing income tax on rental income
Local Property Tax liabilities
Pension assets are different because they benefit from a distinct legislative framework specifically designed to encourage retirement provision. In many cases, spouses can inherit pension assets tax efficiently, while children may have more flexible options compared to inheriting highly taxable property portfolios.
This is why many high-net-worth families are increasingly shifting part of their long-term strategy toward pension funding rather than excessive concentration in property assets.
For business owners, pensions can also become a highly effective intergenerational planning tool. Executive pensions, Master Trust structures, and company pension contributions may allow wealth extraction from trading businesses in a far more tax-efficient manner than retaining excess capital inside property-heavy personal estates.
Business assets themselves may also qualify for valuable CAT Business Relief, reducing the taxable value by 90% where conditions are met. Agricultural Relief can similarly reduce qualifying agricultural property values by 90%. However, these reliefs are highly conditional and increasingly scrutinised. Families cannot assume they will automatically apply.
The broader challenge is that many Irish families are “asset wealthy but liquidity poor.” A family may inherit properties and business assets worth millions, yet still struggle to fund the CAT bill itself without borrowing or selling assets.
Proper succession planning therefore is no longer optional for wealthy families. It requires early coordination across:
Pension strategy
Business succession
Lifetime gifting
CAT threshold utilisation
Trust and ownership structures
International tax planning
Liquidity management
Ultimately, inheritance planning is not simply about reducing tax. It is about preserving family wealth across generations while maintaining flexibility and avoiding forced asset sales.
As Irish property prices continue to rise and family sizes continue to shrink, the importance of proactive inheritance planning will only increase over the next decade.
Disclaimer: The above note does not constitute Financial Advice or Tax Advice but posted for general information purpose only. If you have any specific question regarding inheritance tax planning, please contact us seperately.
