Inheritance tax thresholds set for ‘modest’ increases in Budget 2027

Ministers are still haggling over welfare increases, childcare costs, transport funding and housing measures ahead of Tuesday’s announcement

A final figure on the adjustments of each has yet to be reached, it is understood, but the changes are likely to be in line with previous adjustments to inheritance tax bands, with one Government source saying it would be 'a statement of intent'. File picture 

The Government will make “modest” adjustments to all three inheritance tax bands in Tuesday’s budget.

It is understood that the adjustments would not be the same across all three bands but would be proportionate.

A final figure on the adjustments of each has yet to be reached, it is understood, but the changes are likely to be in line with previous adjustments to inheritance tax bands, with one Government source saying it would be “a statement of intent”.

The final shape of the budget was still being hammered out on Friday, with negotiations still ongoing around the rate of increase of core social protection measures.

While a €7.50 per week rise had been floated in some reports, sources said that the Department of Public Expenditure had “accepted the loss” on that after concerns were raised about the politics of such a move.

The rise is now expected to be either €9 or €10, with social protection minister Dara Calleary said to be “digging in like hell” for the higher amount.

Another issue which sources said would likely run on is the scale of a cut in childcare fees.

Sources said that while the principle of cutting fees was something to which the Government was “deeply committed”, it is about the method in which the cuts could be delivered.

While children’s minister Norma Foley has said that she wants to make “serious inroads” into childcare costs, there are questions about how large the cut would be and when it might kick in. Previous cuts have been given from January in one budget but not until the following September in another.

In justice, there is an expectation of funding to recruit 1,000 new gardaí and to expand prison spaces.

In housing, some measures like an increase to the rent tax credit are said to be “pretty much over the line”, with the level of increase mooted at €300.

However, one senior source said the final amount was “not decided yet”.

Other housing measures, including removing stamp duty for first-time buyers, were said to be still on the table.

Negotiations still underway 

Negotiations between the Departments of Public Expenditure and Housing were still under way, with one source describing them as “challenging” and “robust”.

One source within the Department of Transport raised concerns about funding for public service obligation public transport services, saying they would need a €150m uplift to just “stand still”.

They warned that without an increase beyond this level, the department would struggle to expand public transport services with new routes.

“There’s no recognition from the Department of Public Expenditure that transport keeps the economy and country moving,” the source said.

The source described the negotiations as being a “fierce battle”, adding it was likely to be kicked up to party leaders to be decided.

Another source said they were “working through” negotiations, while adding that “pressure points” exist in every budget.