We write to you ahead of Budget 2026 to recommend measures that would strengthen Ireland’s competitiveness, fairness, and financial resilience.
As a financial planning and investment advice firm, working closely with Irish families, entrepreneurs, and investors, these recommendations are based on day-to-day experience with clients who are trying to plan responsibly for their financial futures and make decisions that ultimately support wider economic growth.
Increase in the Small Gift Exemption
The current €3,000 annual Small Gift Exemption has remained unchanged since 2004, despite significant inflation and increases in the cost of living. It is increasingly inadequate as a tool to encourage modest, tax-efficient wealth transfers across generations. An increase to €5,000 per annum would bring the exemption more in line with modern realities. It would also have the following benefits:
- Encourage inter-generational wealth transfers at earlier stages, supporting younger families with childcare, housing, and education costs.
- Reduce the administrative burden for both Revenue and taxpayers by lowering the number of small transactions that fall into taxable categories.
- Signal recognition that thresholds must keep pace with inflation and social need.
Increase in CAT Thresholds
Capital Acquisitions Tax (CAT) thresholds, particularly Group A, have not kept pace with property price inflation. Parents seeking to pass on the family home, often leave their children facing significant tax bills, despite modest family circumstances. This is frequently forcing the unwanted sale of the home, for the sole reason of paying the tax bill.
We strongly suggest that you consider a material increase in the Group A threshold to reflect the average house price in Dublin and regional cities. The other thresholds should then be increased on a pro-rata basis. We further suggest that you build in regular indexation thereafter, so that thresholds do not again lag behind reality.
This reform would provide fairness, reduce the emotional and financial strain associated with inheritance, and help families plan for wealth transfer in a structured, transparent manner.
Reduction in Capital Gains Tax (CGT) Rate
At 33%, Ireland has one of the highest CGT rates in Europe. This high rate acts as a deterrent to investment, business formation, and entrepreneurial activity. Even a modest reduction to 30% would represent progress towards competitiveness without dramatically reducing Exchequer receipts.
Benefits would include:
- Encouraging investors to recycle capital into new ventures.
- Supporting Irish entrepreneurs who rely on equity investment.
- Making Ireland more attractive compared to other jurisdictions with lower CGT regimes.
Enhancing Entrepreneurial Relief
The current lifetime limit of €1 million under Entrepreneurial Relief is now wholly inadequate in the context of business valuations and the risks entrepreneurs shoulder. We regularly see entrepreneurs who, after decades building businesses that employ dozens of people, face disproportionate tax hurdles at exit.
Raising the limit to at least €3 million would reward risk-taking and wealth creation in a proportionate way, while also encouraging founders to reinvest proceeds into new Irish enterprises. From a wider perspective, making this change would also demonstrate Ireland’s commitment to being a pro-entrepreneurship jurisdiction.
Reform of Investment Fund Taxation
Ireland’s current regime for the taxation of investment funds is outdated and acts as a barrier to prudent, long-term savings. Three reforms would transform the system:
- Alignment with CGT Rates
The current 41% exit tax on fund gains is punitive compared to direct shareholdings and deposits. Moving fund gains to the CGT rate would create a level playing field and encourage more households to save and invest for the future. - Abolition of the 8-Year Deemed Distribution Rule
This rule, requiring tax to be paid on notional gains every eight years penalises long-term savers. Abolition would encourage individuals to remain invested, thereby better supporting long-term financial health. - Loss Relief Across Funds
At present, investors cannot offset a loss in one fund against a gain in another. Allowing loss relief would create fairness and mirror the treatment already available to direct investors. It would also enhance investor confidence in regulated fund products.
Collectively, these measures would modernise Ireland’s fund taxation regime, promote financial wellbeing, and channel more domestic capital into productive investment.
Minister, we believe these proposals would create a fairer, more competitive, and future-focused financial system. They would support inter-generational fairness, reward entrepreneurship, and encourage long-term saving—all objectives aligned with national economic policy.
We urge you to consider these reforms in Budget 2026 as measures that would deliver real benefits for households, entrepreneurs, and the wider economy. Thank you for your consideration.
Yours sincerely,
The team at Acuvest (on behalf of our valued clients).
