Budget 2027: private client tax

As Ireland looks ahead to Budget 2027, there is a significant opportunity to strengthen the conditions that support entrepreneurship, investment and long-term business ownership. Tax policy plays an important role in shaping business decisions, from encouraging investment and rewarding risk-taking to facilitating succession planning and preserving indigenous Irish businesses.

A targeted package of measures focused on capital gains, the self-employed and business succession could enhance Ireland's competitiveness, support economic activity and help ensure successful Irish businesses continue to thrive for generations to come.

Budget 2027 priorities to support entrepreneurs and business owners

1. Reduce Capital Gains Tax (CGT) to encourage investment and economic activity

Ireland's 33% Capital Gains Tax rate remains high by international standards and may discourage investors and business owners from disposing of assets, reinvesting capital, and pursuing entrepreneurial activity.

A reduction in the CGT rate would:

• Encourage greater investment and risk-taking.
• Increase the movement and productive deployment of capital.
• Support entrepreneurs who have built and grown successful businesses.
• Enhance Ireland's competitiveness relative to key jurisdictions such as the UK and the US.
• Stimulate economic activity through increased transactions and reinvestment.

Those who invest their capital already assume significant commercial risk. A lower CGT rate would provide a stronger incentive to invest, grow businesses, and recycle capital into future ventures.

2. Reduce the tax burden on the self-employed

The additional 3% USC surcharge applying to certain self-employed individuals with income exceeding €100,000 should be abolished. This surcharge creates an unequal tax burden between entrepreneurs and employees and can result in marginal tax rates exceeding 55% in certain circumstances.

Removing the surcharge would:

• Promote fairness between employed and self-employed taxpayers.
• Reward entrepreneurship and business ownership.
• Support SMEs and family-owned enterprises.
• Improve Ireland's competitiveness as a location for enterprise and investment.

At a time when business owners are facing increasing compliance and economic pressures, the tax system should support rather than penalise entrepreneurial activity.

3. Revisit Ireland's family business succession framework

Family businesses are the backbone of the Irish economy, yet succession planning often remains one of the most difficult challenges facing owners.

Recent changes limiting certain CGT retirement reliefs, including age-related restrictions and monetary caps, have added complexity and uncertainty to succession planning.

A comprehensive review of the succession tax regime should consider:

• Whether current age-related restrictions achieve their policy objectives.
• The impact of the €10m and €3m relief caps on genuine family business transfers.
• How tax policy can encourage succession planning at an earlier stage.
• Maintaining flexibility where business owners are not yet in a position to transfer ownership.
• Increasing the CAT Group thresholds to better reflect the significant increase in asset values, particularly business and property values, in recent years.
• Protecting indigenous Irish businesses and family ownership.

Ireland should aim to create a framework that encourages orderly succession rather than unintentionally encouraging business sales to third-party or overseas purchasers.

4. Supporting long-term Irish ownership

A key objective of Budget 2027 should be preserving and strengthening Irish-owned businesses.

Tax policy can play an important role in:

• Facilitating intergenerational transfers.
• Protecting jobs and local communities.
• Retaining decision-making and ownership within Ireland.
• Supporting long-term economic resilience.

Well-designed succession reliefs can help ensure successful family businesses remain in Irish hands for future generations.

Get in touch if you have any queries you might have in relation to Budget 2027.