With Mairéad Hennessy, Taxkey

Gifting money to children in Ireland sounds like the simplest thing in the world until you look at what it costs, and what it saves. Inheritance tax is charged at 33% on anything above €400,000 passing from a parent to a child, and that threshold covers everything received over a lifetime, not just what arrives at the end.

The question most families never properly work through is whether to move assets during their lifetime or leave them until the end. That single decision changes the size of the bill, the timing of it, and which generation ends up paying it.

Paddy Delaney is joined by Mairéad Hennessy of Taxkey, a firm of independent tax consultants, for a practical conversation about passing wealth on in Ireland.

How much can you gift a child tax free in Ireland?

Two separate allowances do the work, and they are commonly confused.

The first is the small gift exemption: any person can receive €3,000 per calendar year from any other person, free of Capital Acquisitions Tax. It applies to gifts only, never to inheritances, and it does not count towards the lifetime threshold. Two parents can therefore move €6,000 a year to each child without using a cent of anybody's allowance.

The second is the Group A threshold of €400,000, which is the cumulative total a child can receive from their parents over a lifetime before CAT applies at 33% on the excess.

Used properly, the smaller of the two is worth far more than it looks. A married couple with four children and six grandchildren can move €60,000 a year, none of which aggregates against anyone's threshold. Over a decade that is €600,000 passed on, tax free, with the €400,000 allowance still fully intact.

What we cover in this episode

• Why the tax question is the wrong place to start, and what has to be worked out first

• How the €3,000 small gift exemption works, the two things that make it fail, and why it is worth far more over time than the figure suggests

• How capital gains tax paid by a parent can be credited against a child's inheritance tax bill, and the two-year condition attached to it

• What a business transfer needs in place in the ten years before it happens, and why the child has to be in the room for those conversations

• Family partnerships: how they work, who they suit, and what they cost you in privacy

• The US Federal Estate Tax exposure sitting in Irish households through employer shares, and the $60,000 threshold behind it

Gift now, or leave it until the end?

The argument for gifting during your lifetime is a valuation argument. What you hand over today is presumably worth less than it will be in twenty or thirty years' time, and everything it grows by after the transfer grows in your child's name rather than in your estate. A lifetime transfer also gives you something an inheritance never can, which is a date you choose.

The argument against is that a lifetime gift can trigger capital gains tax for the parent and stamp duty for the child, where an inheritance triggers neither. Mairéad explains the credit that softens this, and the condition attached to it that catches families who plan to sell.

There is no silver bullet here, and she says so plainly. There is a set of decisions that are better made deliberately than by default.

Who is Mairéad Hennessy?

Mairéad Hennessy runs Taxkey, a firm of independent tax consultants working across inheritance and estate tax planning, business succession, property investment and cross-border tax. Independent in the same sense we use the word: no products, no commissions, paid by the client rather than by a provider. Taxkey offer 30-minute and 60-minute online consultations for people who want to find out what they should be thinking about before committing to anything larger.

Also in this episode

Recorded on 31 August 2026, the day the Roadmap for the Taxation of Retail Investment was published, so there is also a first read on the Investment Account coming in 2027 and what it means for the eight-year deemed disposal rule.

Who this episode is for

If you are approaching retirement with a business, an investment property or a portfolio that will have to move at some point, or you are in line to inherit and would rather understand what that means in advance than afterwards, this one is for you.

For the full written version with the worked figures, read inheritance tax in Ireland: should you gift now or leave it until the end?

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🔗 Mairéad Hennessy, Taxkey: https://taxkey.ie

Book mentioned: Self Employed – The Forgotten Community by Dan O'Donoghue — https://buythebook.ie/product/self-employed-the-forgotten-community/