‘CAT cut would boost charities’ legacy income’
A group of more than 90 Irish charities has called for a cut of three points 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.
The charities’ call comes ahead of International Legacy Giving Day on 13 September.
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.
British incentives
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.
Chair Niall O’Sullivan says that legacy giving in Britain, where tax incentives are in place, generates Stg £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”.
Awareness
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.
Solicitor and My Legacy board member Susan Muphy says many of her clients are often under a misconception that, in order to leave a gift in their will, they must be very wealthy.
“No matter how much an estate is worth, even an amount of a few hundred euro can be worth a lot to a charity,” she says, adding that a tax break could make “a huge difference” to My Legacy’s member charities in the future.