'Mum and dad would be turning in their graves': Campaign highlights 'discrimination' from Ireland's inheritance tax rules
A campaign to change Ireland’s “discriminatory” inheritance tax rules says a legal challenge could be taken if the Government does not equalise inheritance laws for childless citizens.
A Corkman leading a campaign to change Ireland’s “discriminatory” inheritance tax rules says a legal challenge could be taken if the Government does not equalise inheritance laws for childless citizens.
James Sexton, a teacher from Model Farm Road in Cork, is part of a group called End Discrimination In Inheritance Tax (Edit). The group's campaign says current tax rules are unfair, outdated, and hurting citizens without children. Edit has made a pre-budget submission to Government and also made a pre-budget presentation to Oireachtas members on the issue, at the invitation of Fianna Fáil TD Catherine Ardagh.
James and his wife Sheila do not have children. “We married in our 40s and we do not have a family of our own – but we do have a family of loved ones who are an important part of our lives,” said Mr Sexton. “When we got married, we were both advised to make our wills, and it was then I discovered current inheritance tax legislation treats parents very differently to that of childless citizens.”
Under existing rules, Capital Acquisitions Tax is payable at 33% above certain thresholds. The threshold for parent to child (Group A) is €400,000 but the threshold to siblings, nieces and nephews, and grandchildren (Group B) is €40,000. For all others – including close friends, unmarried partners, carers (Group C) - the threshold is €20,000.
“We are not advocating for anything to be removed from parents but Ireland’s 1m childless citizens deserve equality,” said Mr Sexton. “I have a family of loved ones who are an important part of our lives but Sheila and I are not able to pass tax-free the same amount of our fully taxed assets to our loved ones as that afforded to parents - we are permitted to pass 10 times less.
"The State must not discriminate between individuals – but this is exactly what it is happening and it needs to change.”
Inheritance tax thresholds were increased for all groups in Budget 2025 by then finance minister Jack Chambers, with Group A rising from €335,000 to €400,000, Group B rising from €32,500 to €40,000, and Group C rising from €16,250 to €20,000. A further increase in the three thresholds has been mooted in the upcoming budget but Mr Sexton and the Edit campaign believe this isn’t sufficient. “We suspect the Government may tweak the thresholds in the budget but you can't remove a bit of discrimination. There needs to be equality for all citizens," Mr Sexton said.
He said Ireland currently has a "hierarchy of entitlement". “Our Taoiseach, rightly, can pass assets up to €1.2m tax-free to his three children. He can also if so, inclined pass assets up to 40,000 tax-free to each of his siblings, nephews, nieces or future grandchildren. By contrast, we can only pass assets up to 40,000 tax-free to each of our loved ones and can’t avail of the substantial threshold of €400,000 that parents can. This can never be described as equitable."
Mr Sexton cited a 2014 OECD report which showed that Ireland had the third highest rate of childlessness in the developed world at 18.4%. "This figure will have risen over the last decade to more than 1m Irish citizens today," said Mr Sexton.
"This is coming down tracks for more and more people. and questions have to be asked, and answered. I believe politicians in Government haven’t answered the question of discrimination because they are afraid to open a can of worms."
James and Sheila built their home in the garden of James’ parents on Model Farm Road. Mr Sexton’s brother Kieran, who was living in London, inherited the Sexton family home when their father passed away in May 2022. “When I inherited mum and dad's house in 2023, I paid €165,000 inheritance tax," said Kieran. "To pay the tax, I had to sell my home in London and I moved back home to Cork after 30 years of teaching in secondary schools. I was very fortunate to have inherited €335,000 tax-free from mum and dad in the form of our family home."
Kieran is now 58, single, and has no children. Just before Christmas 2024, he was diagnosed with Mantle Cell Lymphoma – is an incurable condition. “I have completed my chemotherapy treatments and I am now in remission. When I do die, I would like to pass on our family home to my nephews or nieces - but this is now going to be impossible. Nephews or nieces can each inherit €40,000 tax-free. The house is probably now worth €800,000, so there would be another tax bill of €237,600 if left to two of my nieces. They aged in their 20s and live at home with their parents, and do not have big cash savings so they won't be able to afford this and will have to sell the house - our family home. If I had two children, there would be no inheritance tax due after my passing - as each would be able to inherit €400,000 tax-free.
“Mum and Dad would be turning in their graves knowing how much extra tax the State is determined to take from their home alone when I die.”
Edit have had correspondence with dozens of politicians who have acknowledged there is an issue. Taoiseach Micheál Martin said review of Capital Acquisitions Tax should focus on Group B. However, he raised concerns that equalising all the thresholds could "strengthen inequality of opportunity for future generations" and have "significant tax avoidance issues".
Edit rejects these assertions and said the current system is no longer acceptable. "At the very least, a person's principal private residence (their home) should be exempt from inheritance tax.
"This isn't something that only concerns the wealthy - any couple or single person who do not have children and whose only asset perhaps is their home will be affected. Unfortunately, so many couples and single people without children are not even aware of this inequality. It is only upon their passing that their loved ones will realise how unfairly they are being treated by the State - with a very significant inheritance tax bill to pay."
