Paschal Donohoe (Dublin Central, Fine Gael)
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Capital Acquisitions Tax (CAT) is a beneficiary-based tax on gifts and inheritances that is payable on the value of the property received. For CAT purposes, the relationship between the person giving a gift or inheritance (i.e. the disponer) and the person who receives it (i.e. the beneficiary) determines the maximum amount, known as the “Group threshold”, below which CAT does not arise.

There are three Group thresholds:

• the Group A threshold (currently €400,000) applies where the beneficiary is a child of the person giving the gift or inheritance
• the Group B threshold (currently €40,000) applies where the beneficiary is a brother, sister, nephew, niece, lineal ancestor or lineal descendant of the person giving the gift or inheritance
• the Group C threshold (currently €20,000) applies in all other cases.

My officials have examined Capital Acquisitions Tax as part of the annual Tax Strategy Group exercise. The resultant papers outline the tax policy considerations for the Government and the options available to it in forming this year’s Budget. They are published in advance of the Budget and are the best means of considering issues such as inheritance tax in an analytical and transparent way. The Tax Strategy Group is not a decision-making body and the papers produced by my Department are simply a list of options and issues to be considered in the Budgetary process.

A link to this year’s paper on Capital Taxes can be found here: www.gov.ie/en/department-of-finance/collections/budget-2026-tax-strategy-group-papers/

It should be noted that there would be a significant cost in making any further substantial changes to CAT. The options available for setting CAT thresholds must be balanced against competing demands, and as part of the annual Budget and Finance Bill process.

As the Deputy will be aware, it is a longstanding practice that the Minister for Finance does not comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.