Budget 2027

With Budget 2027 now announced, we’ve put together a summary of the key highlights and what they may mean for you, your family and your business. Alongside this, we’re delighted to share the first edition of our new Financial Markets & Economy Report, a 10-page review packed with insights, clear charts and commentary on the trends shaping markets today. Whether you’d like a quick overview or a deeper read, we hope you find it useful. The full report (pdf) is available to download at the bottom of this email. 

Budget 2027 - Key Highlights

Investment Taxation Changes

• Exit Tax reduced from 38% to 35%. 
• Capital Gains Tax (CGT) reduced from 33% to 31%

Personal Taxation 

• The standard income tax rate bands have been increased by €2,500, bringing them to €46,500 for single individuals, €55,500 for married couples and civil partners (subject to a cap for two-income couples to the lower of €37,500 or the lower earner’s income). 

Inheritance Taxation 

The Capital Acquisitions Tax (CAT) thresholds have increased. 

• Group A (parent to child) threshold has increased from €400,000 to €420,000.
• Group B (e.g. Grandchild) threshold has increased from €40,000 to €44,000.
• Group C (stranger) threshold has increased from €20,000 to €22,000.

New Personal Investment Account (PIA) The personal investment account announced in the budget is a good tool, but not a game changer for company directors in Ireland. Those who are taxed heavily and have limited scope to maximise pension contributions (e.g. Solicitors, Dentists) will see this as an efficient way to invest. Company directors will continue to look at entrepreneur relief (or retirement relief) and maximising their pensions before considering these accounts. That said, I think all clients should take advantage of the new personal investment accounts, which can be opened from July 1st, 2027. The key highlights are:

• Individuals can contribute up to €12,000 to an investment account each year. There is no minimum contribution. One account per adult (over 18yrs) can be set up. 

• Account balances above €50,000, will be subject to an annual tax of 1%. No Capital Gains Tax (CGT), Dividend Witholding Tax (DWT) or other similar taxes will apply to the accounts.

• The investment platform will handle the tax calculation and reporting, simplifying the process for account holders.

• The investment account will offer access to a diversified range of investments, including exchange-traded funds (ETFs), bonds, and investment funds. Investment account holders will not be able to invest in cash deposits.