On Tuesday, 6 October 2026, the Government will unveil Budget 2027 and, as we did last year, we would like to put forward a few suggestions.
Dear Minister Harris,
Last year, we wrote to your predecessor with a number of requests that we believed would help Irish people to build, manage, invest and transfer their wealth more effectively.
Budget 2026 reduced the tax applying to many investment funds and life assurance products from 41% to 38%, while the lifetime limit for Entrepreneur Relief increased from €1 million to €1.5 million. Both of these were welcome.
But there is still plenty of room for improvement.
Our starting point is simple. Ireland should encourage people to take greater responsibility for their own financial futures. That means making it easier to invest for the long term, build businesses, transfer wealth sensibly and plan with greater certainty. With that in mind, here are some changes we would like to see in Budget 2027.
Increase the Small Gift Exemption
The annual Small Gift Exemption remains at €3,000 per person, a figure that has been unchanged for more than two decades.
It remains a useful financial planning tool, particularly for parents and grandparents who want to transfer some wealth during their lifetimes rather than leave everything as an inheritance.
But €3,000 today clearly does not have the purchasing power it once had. We would like to see the exemption increased to at least €5,000 p.a. per person, ideally with some form of indexation thereafter.
Encouraging modest lifetime gifting can help younger family members at the stage when money may be most valuable to them, perhaps towards education, a house deposit or simply establishing greater financial security.
Increase and index the CAT thresholds
There was no change to Capital Acquisitions Tax thresholds in Budget 2026. The current lifetime thresholds remain €400,000 for Group A, €40,000 for Group B and €20,000 for Group C, with amounts above the relevant threshold generally taxed at 33%.
Should these thresholds repeatedly fall behind increases in property and asset values, only to be adjusted occasionally? We don’t believe they should.
We would like to see a further increase in the thresholds in Budget 2027, followed by a sensible form of indexation. That would provide greater certainty for long-term estate planning and reduce the gradual erosion in their real value.
Reduce Capital Gains Tax
Ireland’s headline Capital Gains Tax rate remains 33%, which we continue to believe is too high. A high CGT rate can influence the decisions of business owners, entrepreneurs and ordinary investors about whether to sell an asset, realise a gain or reinvest capital. It can also create a “lock-in” effect, where investors hold assets primarily to avoid triggering a tax liability.
For investors with significant portfolios, this can also discourage sensible restructuring or diversification, particularly where a large gain has built up in a concentrated investment or asset.
We previously called for the rate to be reduced from 33% to 30%, and we continue to believe this would be a sensible first step.
Capital that is realised can be reinvested into businesses and other productive assets. The tax system should encourage that, rather than discourage transactions that might otherwise make good financial sense.
Go further with Entrepreneur Relief
We welcomed the increase in the lifetime qualifying limit for Entrepreneur Relief from €1 million to €1.5 million. But we believe the Government should now go further.
Entrepreneurs often spend years accepting financial risk, uncertainty and lower short-term income while building their businesses. A more meaningful lifetime relief would better recognise that contribution. We would like to see the lifetime limit increased to at least €3 million.
Ireland rightly works hard to attract international investment. We should apply similar ambition to encouraging people to establish, grow and ultimately realise value from successful Irish businesses.
Finish the job on investment taxation
Budget 2026 delivered an important first step by reducing the tax rate applying to many investment funds and life assurance investments from 41% to 38%. Unfortunately, much of the underlying complexity remains.
Investments subject to the gross-roll-up regime still face the eight-year deemed disposal rule, under which tax becomes payable even though the investment has not actually been sold. Also, the ability to offset losses between funds is restricted, when compared to the Capital Gains Tax regime.
For long-term investors, this adds complexity and can interfere with the benefits of compounding. These rules can also distort otherwise sensible investment decisions by making tax considerations more important than they should be.
Our preference remains clear. We would ultimately like to see the tax rate on investment funds aligned more closely with CGT, the eight-year deemed disposal regime abolished and appropriate loss relief permitted across investment funds.
The Personal Investment Account – we eagerly await the detail
One announcement we will be watching closely on 6 October is the new Personal Investment Account.
The broad outline announced so far appears to move in the right direction. The account is expected to give Irish-resident adults a simpler way to invest in assets such as listed shares, bonds, ETFs and other suitable investment funds through participating regulated providers. It is also expected to avoid some of the complexity of the current investment taxation system, including the eight-year deemed disposal rule.
If delivered well, that could represent a good development.
Participating providers are also expected to handle much of the administration around calculating and paying tax, which should make the system far easier for ordinary investors to understand and use.
However, some of the most important details are still awaited. In particular, we will be watching for the tax-free threshold, the annual contribution limit and the tax rate that will apply above the threshold.
Those figures will determine whether the Personal Investment Account becomes a genuinely important part of personal financial planning in Ireland or simply another niche savings product. Get them right and the PIA could encourage more people to invest for the long term. Get them wrong, by setting contribution limits too low or taxation too high, and much of the opportunity could be lost.
For investors with larger portfolios, the annual contribution limit will be particularly important in determining whether the PIA becomes a meaningful part of long-term financial planning or remains primarily a retail savings product.
Simplicity will also be vital. One of the biggest weaknesses of the current Irish investment system is that it is unnecessarily complicated. A successful Personal Investment Account should be easy to understand, flexible enough to remain relevant throughout an investor’s life and attractive enough to encourage real behavioural change.
We await the detail on 6 October.
Give people more reasons to plan for their future
Minister, there is a common thread running through all of these requests.
We want people to be encouraged to take responsibility for their financial futures and for families to transfer wealth sensibly.
We want to encourage entrepreneurs to take risks and build businesses.
We want to allow investors to realise and reinvest capital without excessive taxation acting as a deterrent and create a simple framework that encourages more Irish people to invest for the long term.
Budget 2027 is an opportunity to make meaningful progress on all of these fronts, and so, we will be watching closely on 6 October.
Yours sincerely,
The team at Acuvest
(on behalf of our valued clients)
