Published 3 November 2026 · Based on Budget 2027, announced in October 2026.
Inheritance tax can come as a surprise, especially when a family inherits a home rather than cash. This guide explains the current allowances, how to estimate a tax bill, and where Section 72 insurance can help.
What changed in Budget 2027?
For gifts and inheritances taken on or after 7 October 2026, the tax-free allowances are:
- Group A: €420,000 — usually children receiving gifts or inheritances from parents.
- Group B: €44,000 — usually siblings, nieces, nephews and grandchildren.
- Group C: €22,000 — usually other relatives and people outside the family.
The inheritance tax rate remains 33%. Special family circumstances can change which group applies. Revenue explains the allowances and relationship rules in detail.
What does “lifetime allowance” mean?
You do not receive a fresh allowance every time you inherit. Earlier taxable gifts and inheritances in the same group, received since 5 December 1991, use up some of it. For example, a gift from your mother and an inheritance from your father usually share the same Group A allowance.
A simple example: a €600,000 inheritance
Suppose a daughter inherits €600,000 from a parent. She has her full €420,000 allowance available, and no other reliefs apply.
- Inheritance: €600,000
- Less tax-free allowance: €420,000
- Amount subject to tax: €180,000
- Tax at 33%: €59,400
If she inherited a house, she would need to find the €59,400 from somewhere. The value of the house and the tax bill are two different figures. See more family examples.
What can Section 72 insurance do?
A Section 72 policy is life insurance arranged to provide money towards an inheritance tax bill. It can help a family keep a property or other assets without having to borrow or sell them to pay the tax.
When the policy is set up correctly, the payout used to pay the relevant inheritance tax can be free of inheritance tax itself. Any extra payout left over may be taxable. The inheritance still creates a tax bill; the policy supplies money to pay it.
Whole-of-life cover is designed to last for life, provided you keep paying the premiums and meet the policy terms. For a couple, joint-life second-death cover normally pays when the second person dies. Read how Section 72 cover works.
Start with a family plan
- List your assets and debts, and decide who you intend to leave them to.
- Check each person’s remaining tax-free allowance.
- Ask whether any tax relief or exemption could reduce the bill.
- Work out how much cash would be available to pay it.
- Consider insurance for any gap, with premiums you can comfortably afford over the long term.
A solicitor can help with your will, and a tax adviser can confirm the tax position. Brian can help you understand the insurance options and compare Section 72 quotations. Review the plan when property values, family circumstances or tax rules change.
Would a policy suit your family?
It depends on the likely tax bill, the cash already available and the cost of cover. Premiums depend on factors such as age, health, smoking status and the amount insured. Historical premium examples in older articles are not current quotations.
Request a Section 72 quote, or call Brian on 01 668 6136 to talk through your figures.
This is a general introduction, not a calculation of your own tax liability. For the detailed rules, see Revenue’s Budget 2027 update and Revenue’s Section 72 guidance.