BUDGET 2026
KEY TAKEAWAYS
As Budget 2026 is unveiled, our experts break down what it means for individuals, businesses, and the broader economy. In this special commentary, Catriona Coady, Head of Tax, and Dermot O’Leary, Chief Economist, share their perspectives on the key measures, tax implications, and economic outlook. From changes in taxation to the government’s fiscal stance, our team offers clear, actionable insights to help clients navigate the road ahead.
01
Catriona Coady,
Head of Tax
What does budget 2026 mean for you?
Budget 2026
With a limited budget package for personal taxation measures, below our Head of Tax, Catriona Coady outlines 6 key takeaways from Budget 2026 relating to savings, investment and succession.
1. Taxation of Investments – Reform
Of key importance is the announcement of a reduction in the rate of tax from 41% to 38% that applies to investments in Irish domiciled funds, life assurance policies, certain offshore funds which can include ETFS and certain foreign life assurance policies. Further details regarding this change will be included in the Finance Bill. It is disappointing that the reduced rate has not been aligned with the standard rate of Capital Gains tax of 33% as was the case back in 2012.
Reflecting the complexity of the tax rules that can apply on retail investments, a roadmap will be published early next year, setting out how it is intended to simplify and adapt the tax rules to encourage retail investment.
In addition, an Implementation Plan for the recommendations of the Funds Sector 2030 Review Report was published today with many of the recommendations progressing or under consideration. Importantly issues such as loss relief on fund investments are under consideration together with the abolition of the eight-year deemed disposal rule.
2. Capital Gains Tax Entrepreneur Relief
Entrepreneur Relief provides for a reduced rate of Capital Gains Tax of 10% on gains from the disposal of qualifying business assets. There is currently a lifetime limit of €1 million on gains that are eligible for the relief. It was announced today that this is being increased to €1.5 million from 1 January 2026. We await the finer details on this change in the Finance Bill as it will be interesting to see if someone who has already availed of this relief can benefit from the increase on a subsequent disposal.
3. Pensions
Also announced is that Finance Bill 2025 will provide for amendments to the tax treatment for the Auto Enrolment (AE) Retirement Savings Scheme specifically relating to the tax treatment of AE retirement savings on the death of the member of the Scheme.
No changes to the tax treatment of private pensions were announced.
4. EIIS (Employment Investment Incentive Scheme)
This income tax relief has been the subject of changes over recent past Budgets but there was no mention of any changes to the relief in its current form in Budget 2026.
5. Stamp Duty exemption for Acquisition of Shares
A new exemption from the 1% Stamp Duty on acquisitions of shares in Irish registered companies is being introduced. It will apply to the shares of companies trading on a regulated market which have a market capitalisation of below €1 billion. This is a welcome change which should help bolster investment in such companies.
6. Capital Acquisitions Tax (CAT) – gift and inheritance tax
It is disappointing that there were no changes announced to the CAT tax free group thresholds which stand at the level set last October of €400,000 (Group A), €40,000 (Group B) and €20,000 (Group C). Consequently, gift and inheritance tax can apply on very modest estates and because the beneficiary is required to pay the tax, this tax can create liquidity pressures for those in receipt of a gift or inheritance.
CATRIONA COADY
Head of Tax, Goodbody
Budget 2026
With a limited budget package for personal taxation measures, below our Head of Tax, Catriona Coady outlines 6 key takeaways from Budget 2026 relating to savings, investment and succession.
CATRIONA COADY
Head of Tax, Goodbody
1. Taxation of Investments – Reform
Of key importance is the announcement of a reduction in the rate of tax from 41% to 38% that applies to investments in Irish domiciled funds, life assurance policies, certain offshore funds which can include ETFS and certain foreign life assurance policies. Further details regarding this change will be included in the Finance Bill. It is disappointing that the reduced rate has not been aligned with the standard rate of Capital Gains tax of 33% as was the case back in 2012.
Reflecting the complexity of the tax rules that can apply on retail investments, a roadmap will be published early next year, setting out how it is intended to simplify and adapt the tax rules to encourage retail investment.
In addition, an Implementation Plan for the recommendations of the Funds Sector 2030 Review Report was published today with many of the recommendations progressing or under consideration. Importantly issues such as loss relief on fund investments are under consideration together with the abolition of the eight-year deemed disposal rule.
2. Capital Gains Tax Entrepreneur Relief
Entrepreneur Relief provides for a reduced rate of Capital Gains Tax of 10% on gains from the disposal of qualifying business assets. There is currently a lifetime limit of €1 million on gains that are eligible for the relief. It was announced today that this is being increased to €1.5 million from 1 January 2026. We await the finer details on this change in the Finance Bill as it will be interesting to see if someone who has already availed of this relief can benefit from the increase on a subsequent disposal.
3. Pensions
Also announced is that Finance Bill 2025 will provide for amendments to the tax treatment for the Auto Enrolment (AE) Retirement Savings Scheme specifically relating to the tax treatment of AE retirement savings on the death of the member of the Scheme.
No changes to the tax treatment of private pensions were announced.
4. EIIS (Employment Investment Incentive Scheme)
This income tax relief has been the subject of changes over recent past Budgets but there was no mention of any changes to the relief in its current form in Budget 2026.
5. Stamp Duty exemption for Acquisition of Shares
A new exemption from the 1% Stamp Duty on acquisitions of shares in Irish registered companies is being introduced. It will apply to the shares of companies trading on a regulated market which have a market capitalisation of below €1 billion. This is a welcome change which should help bolster investment in such companies.
6. Capital Acquisitions Tax (CAT) – gift and inheritance tax
It is disappointing that there were no changes announced to the CAT tax free group thresholds which stand at the level set last October of €400,000 (Group A), €40,000 (Group B) and €20,000 (Group C). Consequently, gift and inheritance tax can apply on very modest estates and because the beneficiary is required to pay the tax, this tax can create liquidity pressures for those in receipt of a gift or inheritance.
02
Dermot O’Leary,
Chief Economist
Big Spender Budget 2026
Budget 2026
Big Spender
Ireland’s “high-quality” problem of booming corporate tax receipts
An ongoing bounty from corporation tax revenues will again facilitate Ireland to run a budget surplus in both 2025 and 2026, despite continued rapid spending growth. Today’s budget package was dominated by spending increases (€8.1bn), with only €1.3bn of tax measures being announced. In general government terms, spending is expected to grow by 8.2% in 2026 to €147bn, following growth of 8.6% in 2025. Since 2019, spending has grown by a cumulative 69% (8% per annum). Despite this, Ireland is expected to run a surplus of 3% of GNI* in 2025 and 1.4% of GNI* in 2026. Debt levels continue to fall, with gross debt set to decline to 59% by end-2026 and net debt to fall to 40% of GNI*.
Dependence on corporation tax even greater in 2026
Warnings about the sustainability of corporate tax revenues are well-worn at this stage. Despite ongoing concerns about the concentration of this tax heading, revenues will grow further both this year and next. For 2026, corporate tax revenues are expected to grow to €34bn and represent 31% of total tax revenues. This is helped by the introduction of a higher 15% rate for large businesses. While we were concerned about the impact of US corporate tax reform on taxes paid in Ireland, these risks are now less acute in our view due to the passing of the One Big Beautiful Bill Act (OBBBA) over the summer. Given the expected profitability of large US multinationals in Ireland over the coming years, this corporation tax bounty may persist.
Welcome ambition on capital spending
While short-term risks to the sustainability of corporate tax revenues may have reduced, it is important that the correct policy decisions are made around what should(n’t) be done with this money. Like recent years, Budget 2026 contains positives and negatives. On the positive, Ireland is putting significant resources to use to address its large infrastructure deficit. Capital spending will rise 12% next year to €19bn, double the level of five years ago. At over 5% of GNI*, Ireland has among the highest levels of capital spend in the EU. Ireland will sensibly continue to funnel some resources to two savings funds, but the scale of the transfers (€6bn-€6.5bn) are small relative to the size of the estimate of the uncertain revenues. Instead, current spending continues to grow at rates that exceed the economy’s medium-term potential.
Click here to read the full report.
DERMOT O'LEARY
Chief Economist
Budget 2026
Big Spender
DERMOT O'LEARY
Chief Economist
Ireland’s “high-quality” problem of booming corporate tax receipts
An ongoing bounty from corporation tax revenues will again facilitate Ireland to run a budget surplus in both 2025 and 2026, despite continued rapid spending growth. Today’s budget package was dominated by spending increases (€8.1bn), with only €1.3bn of tax measures being announced. In general government terms, spending is expected to grow by 8.2% in 2026 to €147bn, following growth of 8.6% in 2025. Since 2019, spending has grown by a cumulative 69% (8% per annum). Despite this, Ireland is expected to run a surplus of 3% of GNI* in 2025 and 1.4% of GNI* in 2026. Debt levels continue to fall, with gross debt set to decline to 59% by end-2026 and net debt to fall to 40% of GNI*.
Dependence on corporation tax even greater in 2026
Warnings about the sustainability of corporate tax revenues are well-worn at this stage. Despite ongoing concerns about the concentration of this tax heading, revenues will grow further both this year and next. For 2026, corporate tax revenues are expected to grow to €34bn and represent 31% of total tax revenues. This is helped by the introduction of a higher 15% rate for large businesses. While we were concerned about the impact of US corporate tax reform on taxes paid in Ireland, these risks are now less acute in our view due to the passing of the One Big Beautiful Bill Act (OBBBA) over the summer. Given the expected profitability of large US multinationals in Ireland over the coming years, this corporation tax bounty may persist.
Welcome ambition on capital spending
While short-term risks to the sustainability of corporate tax revenues may have reduced, it is important that the correct policy decisions are made around what should(n’t) be done with this money. Like recent years, Budget 2026 contains positives and negatives. On the positive, Ireland is putting significant resources to use to address its large infrastructure deficit. Capital spending will rise 12% next year to €19bn, double the level of five years ago. At over 5% of GNI*, Ireland has among the highest levels of capital spend in the EU. Ireland will sensibly continue to funnel some resources to two savings funds, but the scale of the transfers (€6bn-€6.5bn) are small relative to the size of the estimate of the uncertain revenues. Instead, current spending continues to grow at rates that exceed the economy’s medium-term potential.
Click here to read the full report.
