Why Inheritance Tax Might Be the Fairest Tax Ireland Has

There is a finance guy I follow whose feed I mostly enjoy.

But about half his posts beat the same drum. Inheritance tax is unfair. It should be cut. Plan hard so your kids never pay a cent of it.

On the planning, he is right. I am a qualified financial adviser, and I help people do exactly that, legally, every week. If there is a smart way to pass on what you built and keep more of it in the family, take it.

On “unfair,” I think he has it backwards.

I think inheritance tax might be the fairest tax we have.

We tax the salary you got up for at 7am. We give the softest treatment to the money that fell into your lap.

Every country has to choose what it taxes hardest. Work. Spending. Wealth. Or wealth that is handed down.

There is no version where you tax none of them. The only question is the mix.

I think we have the mix backwards.

Start with why an inheritance is different from a wage.

You built your wealth inside a system. Its roads, its schools, its courts, its stock market. You played by the rules and you won. Good. That is what the rules are for.

But wealth compounds across generations. The people who start ahead pull further ahead. Their children start further ahead still. The ladder gets pulled up behind them.

An inheritance is not a reward for playing well.

It is starting the race at the 80-metre line.

Nothing wrong with the runner. Let us just not pretend they earned the head start.

Now look at how Ireland actually does it.

A parent can pass €400,000 to each child tax-free. Everything above that is taxed at 33%.

Sounds reasonable, until you see who it rewards.

It rewards having wealthy parents. If your mum and dad bought a house in the nineties instead of renting, a large windfall is coming your way, and you did nothing to earn it. You get a huge tax-free allowance on money that simply landed on you.

And it quietly punishes everyone else. The person whose parents rented. The person with no children who wants to leave money to a niece, a friend, a cause. They hit the tax wall almost straight away, on the very same kind of unearned transfer.

The more your parents had, the bigger your head start, and the lighter the tax on it. That is the rule, upside down.

The Dutch are about to show you the same mistake, magnified.

The Netherlands is moving to tax investors on their gains every single year. Not when you sell. Every year, on paper gains you have not touched.

So the person who works, saves and invests gets taxed annually on wealth they built and have not even cashed in. Meanwhile the unearned money, the inheritance, sails through comparatively lightly.

Taxing the striver every year and the heir barely at all. The whole thing, pointed the wrong way.

So here is what I would do instead.

Stop taxing the giver. Tax the receiver, and put the limit on them.

Anyone can receive €500,000 in their life, tax-free, from anyone. A parent, a stranger, a friend. Charities, tax-free with no limit at all. Above €500,000, it is taxed at 50%.

Want to give your child a million? Go ahead. They keep €750,000. Still one of the best starts a person can get in this country.

And if your child needs more than half a million to get set up for life, that is not the system failing them. That is not a tax problem. It is a family decision.

One more piece. Reward giving while you are alive, at a lower rate. If people hold everything until they die at 95, their kids inherit at 65, far too late to do much with it. Move that money while everyone is young enough to use it, to buy a home, start a business, breathe. Get it back into the economy instead of frozen in an estate for thirty years.

And this is the trade that makes it worth doing.

Tax the great river of inherited wealth properly, and you can cut the taxes that actually drive an economy. Income tax. The tax on starting a business. The tax on employing people.

Reward work and risk.

Reward the person who builds the wealth. Not the person who inherits it.

I should put myself inside this, because it is easy to argue for a tax you will never pay.

I have three kids. My proposal would tax my family more, not less. I would still vote for it tomorrow.

The obvious objection is that this money has already been taxed. Sometimes that is true. But many of the biggest inheritances are decades of untaxed gains on houses and investments. And more importantly, the tax is not on the person who earned it. It is on the person who received something they never worked for.

I am not arguing to punish success. I am arguing to keep the game playable for the next person sitting down to it.

So plan your own affairs well. Keep every cent the law lets you keep. I will help you do it.

But the next time an influencer or a politician tells you inheritance tax is the great injustice of our age, ask the question I ask about everyone. What do they gain if you believe them, and who is really paying for the tax cut they are selling?

Passing money on well is one of the things I am building into the membership I am creating in the open. The first 50 founding members lock in the lowest rate it will ever have, for life. Doors open in September, and the waitlist hears everything first. You can join the waitlist here.

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