While Budget 2027 introduced a range of measures for businesses and employees, several announcements will be of particular interest to business owners, investors, family enterprises and individuals focused on long-term wealth preservation and succession planning. The changes include reductions in Capital Gains Tax and investment taxation, the introduction of a new Irish Investment Account, increases to Capital Acquisitions Tax thresholds and targeted succession measures for farming families. Together, they highlight the continued importance of proactive planning when it comes to wealth transfer, retirement and intergenerational succession.
Capital Gains Tax Reduced to 31%
One of the most notable announcements for business owners and investors is the reduction in the standard rate of Capital Gains Tax (CGT) from 33% to 31%. The Government has stated that the measure is intended to encourage entrepreneurship, reward risk-taking and support the growth of Irish businesses.
The reduction is a welcome development for entrepreneurs, company shareholders, investors and individuals considering future business disposals or succession planning opportunities. It represents a positive step towards improving Ireland’s competitiveness and reducing the tax burden on those creating and investing in businesses.
That said, many business owners and advisers had anticipated a larger reduction, with expectations that the rate might be reduced to 30% or below. While the change is meaningful, it is unlikely to be viewed as a transformative reform in its own right.
Instead, the announcement may be seen as an encouraging first step towards broader capital tax reform. If future Budgets continue this direction of travel, it could strengthen Ireland’s position as a more attractive environment for entrepreneurship, investment and business succession.
For individuals considering a future business sale, property disposal or company restructuring, the reduction may create opportunities as part of a wider succession or exit strategy. However, the timing and structure of any transaction remains critical, and tax should never be considered in isolation from broader commercial, family and succession objectives.
Capital Acquisitions Tax (CAT) Thresholds Increased
Budget 2027 also includes increases to the Capital Acquisitions Tax (CAT) tax-free thresholds that apply to gifts and inheritances:
- Group A (parent to child): increased from €400,000 to €420,000
- Group B: increased from €40,000 to €44,000
- Group C: increased from €20,000 to €22,000
These increases are welcome and will provide additional scope for families transferring wealth to future generations. However, given continued increases in property values, business values and overall asset prices in recent years, many had expected more substantial increases to the thresholds.
While the changes will provide some relief, they may have a relatively limited impact for families with significant succession or inheritance planning needs. In particular, many private clients will continue to face potential CAT exposures that require careful planning well in advance of any transfer taking place.
The increases are therefore positive, but they do not remove the need for proactive succession planning. Lifetime gifting strategies, business reliefs, agricultural reliefs and broader estate planning measures will continue to play an important role in preserving family wealth and managing future tax liabilities.
New Irish Investment Account
Budget 2027 introduces a new Irish Investment Account, which is due to open on 1 July 2027. The account is designed to make investing simpler and more accessible, with eligible investments including shares, bonds, Exchange Traded Funds (ETFs) and other investment funds.
Importantly, the Government has confirmed that the deemed disposal rules will not apply to investments held within the account. For many individuals and families building long-term wealth, this could become an important addition to their overall investment strategy once further details are published.
Lower Tax Rates on Investment Products
The Government has also announced a reduction in the tax rate applying to Irish and equivalent offshore funds, together with life assurance investment products. From 1 January 2027, the rate of Investment Undertaking Tax and Life Assurance Exit Tax will reduce from 38% to 35%.
These measures are particularly welcome for long-term investors and may improve after-tax investment returns over time. Combined with the introduction of the Irish Investment Account, they suggest a greater policy focus on encouraging saving and investment.
For investors with existing portfolios, now may be an appropriate time to review current investment structures and consider how these developments could influence long-term wealth planning.
Pension Planning
Budget 2027 includes changes to the Standard Fund Threshold regime. The Government has confirmed that age-related valuation factors applying under the Standard Fund Threshold framework will be revised from 1 January 2027, with further details expected in the Finance Bill.
Individuals with significant pension assets should monitor the forthcoming legislation carefully and consider whether the changes may affect their retirement and estate planning arrangements.
Family Farming and Succession
The Budget includes several measures designed to support generational renewal within Irish farming families. For Succession Farm Partnerships, the current three-year holding period will be removed for applications made from 1 January 2027, while the associated tax credit will increase from €5,000 to €10,000 per year for qualifying partnerships registered from 1 January 2027.
Additional agricultural measures include:
- Extension of the accelerated Wear and Tear Allowance for Farm Safety Equipment to 31 December 2029.
- Expansion of the scheme to include 12 additional items of qualifying equipment.
- A reduction in the VAT rate on respiratory vaccines for livestock from 23% to 9%.
- An increase in the Farmers’ Flat Rate Addition from 4.5% to 4.8%.
For farming families considering succession, ownership transfer or partnership structures, these measures may create new planning opportunities and support smoother intergenerational transitions.
Why Succession Planning Matters
Successful succession planning is rarely about reacting to tax changes alone. The most effective plans are developed well in advance, aligning family objectives, business continuity, retirement goals and tax efficiency.
Budget 2027 contains a number of positive measures for business owners, investors and families. The reductions in CGT and investment taxation are welcome, while the increases in CAT thresholds provide additional flexibility for future transfers of wealth.
However, the relatively modest nature of some of the measures also reinforces an important point: effective succession planning should not be dependent on future Budgets or future tax reforms. Families and business owners who engage in planning early are typically best positioned to protect wealth, minimise tax exposures and achieve long-term objectives.
Key considerations continue to include:
- Planning early for the future transfer of wealth and assets.
- Reviewing investment structures as tax rules evolve.
- Considering future business exit and succession opportunities.
- Ensuring pension arrangements remain aligned with long-term objectives.
- Taking a strategic approach to preserving and transferring wealth across generations.
Practical Actions to Consider
Following the Budget announcements, individuals may wish to:
- Review existing succession and estate planning arrangements.
- Reassess future business sale and exit strategies in light of the CGT reduction.
- Consider the impact of the revised CAT thresholds on existing gifting and inheritance plans.
- Review investment portfolios and structures ahead of the introduction of the Irish Investment Account.
- Assess how reduced investment tax rates may support long-term wealth accumulation.
- Revisit retirement and pension strategies when further Standard Fund Threshold details are published.
- Explore succession opportunities available to farming families and family-owned businesses.
How Malone & Co Can Help
Whether you are planning for retirement, preparing for a future business transition or looking to preserve wealth for future generations, effective planning can deliver significant long-term benefits.
Our Tax Advisory team works with business owners, entrepreneurs, farming families and private clients to develop practical succession, investment and estate planning strategies tailored to their individual circumstances.
If you would like to discuss how the Budget 2027 measures may affect your personal wealth, family business or succession plans, please contact a member of our team.
