Inheritance Tax Campaign Seems to Favour the Wealthy

Ireland’s inheritance tax regime has long been criticised for exacerbating income inequality, and now it has become a focal point for the government. This week, Taoiseach Leo Varadkar added the issue to his agenda (starting the inheritance tax campaign), drawing attention to the need for reform.

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Fine Gael, gearing up for an anticipated November election, appears to be positioning itself as a champion for the wealthier citizens. At a recent post-Cabinet press briefing, Simon Harris highlighted the “unfairness” and “anomalies” in the current inheritance tax rules. He pointed out that the existing rules significantly impact those trying to move into family homes, a concern amidst Ireland’s ongoing housing crisis.

Currently, the category A threshold, which is the amount a child can inherit from a parent tax-free, is set at €335,000 and has remained unchanged for years. Some Fine Gael members propose doubling this amount, a move that has sparked debate.

Critics Warn Inheritance Tax Campaign Will Deepen Social Inequality

Critics argue that this change would further benefit the wealthy, increasing social division. The OECD reported in 2021 that Ireland has the highest gap between those likely to inherit and those who are not among 37 wealthy countries surveyed. With the inheritance tax accounting for only 0.6% of the total tax take in 2023, the push for reform seems more about political positioning than addressing broader social inequities.