Inheritance tax overhaul for people who don't have children would cost State hundreds of millions

DEPARTMENT OF FINANCE officials have warned that proposals to overhaul inheritance tax rules for people without children would come at a “significant” cost to the Exchequer and leave far fewer people liable to pay the tax.

The warning is contained in the Tax Strategy Group papers published on Thursday, which set out a range of policy options under consideration ahead of Budget 2027.

Inheritance tax, formally known as Capital Acquisitions Tax (CAT), emerged as a key issue in recent months ahead of the budget , with both Fianna Fáil and Fine Gael pledging to review the current system.

In particular, both coalition parties have signalled they want to address concerns raised by people without children, who currently face lower tax-free thresholds when leaving an inheritance to nieces, nephews or other relatives than parents do when passing assets to their children.