A group of more than 90 Irish charities has called for a cut of 3% in capital-acquisitions tax (CAT) in Budget 2026. The group, called My Legacy, says that such a cut in the tax on gifts and inheritances could see ‘legacy giving’ to charities in Ireland more than treble.

My Legacy is an umbrella group of over 90 national and local charities throughout Ireland. Its mission is to encourage charitable gifts in wills, in order to benefit our future society. My Legacy was established in 2006 by a small group of notable Irish charities who knew the impact gifts in wills can have on the future resources and capacity of a charity.

My Legacy says that legacy giving, or charitable gifts in wills, provides a sustainable source of income for charities but currently accounts for just 3% of overall income for charities in Ireland. The group asserts that reducing the CAT rate from 33% to 30% for beneficiaries of a will, when 10% or more of an estate is bequeathed to charitable causes, could treble legacy gifts for charities by 2050.

CAT is a tax on gifts and inheritances. You may receive gifts and inheritances up to a set value over your lifetime before having to pay CAT. Once due, it is charged at the current rate of 33% (valid from 6 December 2012).

Susan Murphy, Solicitor and Board Member at My Legacy, said misconceptions around wealth often prevent people from considering legacy gifts.

“I’ve experienced many times with clients a misconception that in order to leave a gift in their Will, they must be very wealthy. People often underestimate how much they are worth and how much their estate will amount to once property, benefits, insurance and pensions are accounted for,” she said.

“But no matter how much an estate is worth, even an amount of a few hundred euro can be worth a lot to a charity. When scaled up across the population, an incentivising tax break to encourage people to consider including a gift in their will could make a huge difference to our member organisations in the future.”

Red C research commissioned by My Legacy last year found that 35% of respondents said that they would consider a bequest to a charity if there were a tax break available.

The group also argues that tax incentives would encourage professional advisors to discuss philanthropy with clients. My Legacy also believes that the proposed tax reduction would also increase public awareness on the importance of having a will.

Chair Niall O’Sullivan says that legacy giving in Britain, where tax incentives are in place, generates £4.5 billion a year from probated legacy bequests. “That’s nearly 60 times more than in Ireland, despite the UK economy being just over ten times larger,” he adds.

O’Sullivan says that the current annual value of charitable bequests in Ireland is around €90 million.

“With increasing private wealth and an aging population, we could expect that figure to increase substantially in the next 25 years,” he states, but warns that, without incentives, “we could be seriously short-changing Irish charities in potential income and support”.

 

NB – This is a guide for information purposes only and does not constitute legal advice. If you have an issue requiring legal advice, please contact any of the team at Nolan Farrell & Goff LLP, whose numbers can be found on our website www.nfg.ie, or email info@nfg.ie.