Debate Intensifies Over Ireland’s Inheritance Tax System

Ireland’s inheritance tax, currently set at 33% for gifts or inheritances exceeding a specified threshold, is facing scrutiny as various voices call for reform. Critics argue that the existing system is unfair, labeling it a “tax on grief.” Among the most vocal is financial advisor and analyst Karl Deeter, who shared his concerns on the radio program The Hard Shoulder.

Deeter contends that this tax penalizes individuals who have worked hard to accumulate wealth over their lifetimes. He stated, “Someone dies and next of all, the Government are coming in to take all your stuff – it’s silly.” He believes this approach punishes diligence and sacrifices made by individuals throughout their lives. “It’s effectively double taxation because it also is taxing things that have already been taxed,” he added.

The proposed solution from Deeter includes abolishing the inheritance tax in favor of property taxes and taxes on wealth and assets. He emphasizes that taxing the transfer of assets between loved ones is fundamentally flawed. “The reason you know it is because there is no limit between two people in a married couple; that is known, it’s accepted,” he explained. “But suddenly the Government wants to jump in and take all your stuff when it’s going to a child who you love just as much.”

In contrast, some experts advocate for maintaining or even increasing the inheritance tax. Thomas Hubert, editor with The Currency, argues that the tax system should be shifted to focus more on inheritance. “Just scrap taxes somewhere else and tax inheritance, because that’s really something you get that you haven’t earned yourself,” Hubert stated. He believes that inheritance is often a matter of luck, dependent on one’s family background rather than individual merit.

Hubert further elaborated on his perspective, expressing a preference for paying lower taxes on income while being willing to face higher taxation upon inheriting from his parents. “I’m working at the moment, paying a lot of tax on my income – I’d rather pay less now and pay more when, hopefully as late as possible, I inherit from my parents,” he explained. He views this eventual inheritance as a potential bonus for retirement planning.

The ongoing debate around inheritance tax in Ireland raises critical questions about fairness and the impact of taxation on families during difficult times. As opinions diverge, the conversation continues to evolve, reflecting broader societal values regarding wealth distribution and taxation.

With voices like Deeter advocating for reform and others like Hubert supporting the current tax structure, it remains to be seen how policymakers will approach this contentious issue in the future.