Section 72

No Surprise in Budget 2026 – Inheritance Tax Still Unchanged

You may have heard talk about “big changes” in Tuesday’s Budget, especially around tax.


But here’s the reality: there was no change in Budget 2026 that affects Capital Acquisitions Tax (CAT) — the tax more commonly known as inheritance tax.

The tax rate stayed the same, the thresholds remain unchanged, and so whatever your estate planning strategy was before, it still holds.

What Did Not Change

  • The tax-free threshold for a child inheriting from a parent remains €400,000. (Source: Citizens Information)

  • The rate of tax on the amount above that threshold remains 33 %.

  • There was no announcement in Budget 2026 to increase CAT thresholds or reduce the CAT rate — despite ongoing political calls for reform.

In short: your children or beneficiaries are still exposed to the same inheritance tax rules as before, and there is no automatic relief following this week’s Budget.

 

Why This Matters — A Realistic Example

Let’s bring this to life with a simple example.

 

Meet John and Mary

  • Ages: Both 55 on their next birthday (non-smokers)

  • Married, two children

  • Estate value: €2,000,000

  • Most of the value is in the family home, plus some savings and investments

 

What the Children Can Receive Tax-Free

Each child gets a tax-free allowance of €400,000 (the Group A threshold).
Two children × €400,000 = €800,000 tax-free.

What Remains Taxable

€2,000,000 − €800,000 = €1,200,000 taxable at 33 %
Tax bill = €396,000

Without a plan in place, the children may have to sell assets or borrow just to pay that tax.

 

How a Section 72 Policy Helps

 

A Section 72 life assurance policy is specifically designed to cover that tax liability.

  • Cost of a policy to cover €396,000 = €5,339.12 per year

  • If John & Mary both live to age 83 (average life expectancy in Ireland), they’ll pay around €149,495 in premiums.

  • The policy is guaranteed to pay €396,000 on death.

  • That’s a net financial gain of €246,505, plus an additional €49,333 saved in avoided CAT on the premiums themselves.

That’s a total financial benefit of €295,838, not to mention the peace of mind, simplicity, and emotional relief it provides to their children at a difficult time.

Bottom line: Under the right circumstances, a Section 72 policy is a game changer. It saves time, money, and stress for your loved ones.

 

Key Takeaway

Budget 2026 did not bring any change to Ireland’s inheritance tax regime.

  • The threshold remains €400,000 for children.

  • The rate remains 33 %.

  • Any estate value above that continues to be taxed as before.

If your estate is substantial, it’s still wise to consider a Section 72 policy to ensure your beneficiaries aren’t burdened with a large tax bill at your passing.

 

Call to Action

If you’d like to take 30 minutes to explore your version of John & Mary’s scenario, and see exactly how much tax your children might face — and how to avoid it — Call Brian on 01 668 6136 to book a short Zoom consultation.

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