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14 October, 2026
Beyond words goes here
Kevin Doherty, Head of Business Owner Wealth Management, Davy
For business owners and entrepreneurs, Budget 2027 was notable less because it delivered transformative tax change and more because it moved meaningfully in a direction many of us have been advocating for some time. In our Pre-Budget Submission 2027, we called for an end-to-end review of the tax system as it serves Irish business as well as a series of more immediate tax changes, including a reduction in the headline rate of Capital Gains Tax (CGT), a review of inheritance tax thresholds and the incentivisation of personal investing in diversified funds.
Budget 2027 delivered important directional change on many of our immediate asks.
The reduction in the headline CGT rate from 33% to 31% is welcome. It is the first reduction for many years and sends an important signal that Government recognises the role taxation can play in encouraging entrepreneurial activity, investment and the productive use of capital.
The cut is, however, smaller than our recommendation (25%) and it remains to be seen whether a two-percentage point reduction will be sufficient to materially change behaviours to the benefit of indigenous Irish enterprise and, by extension, the national Exchequer.
There is an interesting historical precedent.
In Budget 1998, the Government reduced the headline CGT rate from 40% to 20%. CGT receipts almost doubled from €245.2 million in 1998 to €452.3 million in 1999. While our economic context now is obviously very different, the experience does illustrate an important point: tax rates can influence when owners sell businesses, realise gains and redeploy capital.
A multi-annual CGT roadmap, grounded in a review of the competitiveness of our regime relative to European peers, would help Irish business owners plan capital allocations with certainty.
The new Investment Account is arguably an even more significant structural reform.
Davy has long advocated for the introduction of incentives for retail investing in Ireland, in tandem with a series of changes to taxes which act to disincentivise investment in funds.
From July 2027, individuals will be able to invest up to €12,000 annually in shares, bonds and funds with no tax payable while the account remains below €50,000. A 1% annual flat tax will apply to values above that threshold, with the deemed disposal rule not applying.
This is a very welcome development and, hopefully, one on which we can build to ensure that Irish households maximise returns on their savings in a risk-appropriate manner.
More disappointing, however, is no concrete commitment to resolving the issues with fund taxation. We hope to ultimately see a clear pathway to the full removal of deemed disposal and a full equalisation of investment undertaking tax with capital gains tax, helping Irish business owners invest their hard-earned capital in a diversified way without unfair tax costs.
There was progress on inheritance taxation as well. The Group A CAT threshold, covering inheritances between parents and their children, increased from €400,000 to €420,000, alongside increases in the Group B and C thresholds. While the changes are welcome, we feel the adjustments do not appropriately reflect asset value appreciation. We would welcome a more systemised approach to the setting and indexation of CAT thresholds.
There were other measures in Budget 2027 which were supportive of Irish business owners, with the introduction of a €1 billion ISIF programme running to 2030 targeted at helping Irish indigenous businesses scale internationally while remaining headquartered in Ireland particularly noteworthy. Other measures, including changes in personal taxation, the extension of certain business-related reliefs and commitments to simplification, are all welcome.
In the context of the challenging backdrop to budget development, aired extensively by the government and commentators, the fairest assessment for business owners is that this Budget represents progress rather than perfection. None of the constituent measures represent radical reform, but collectively they are an acknowledgement of the importance of Irish-owned business and the cost, tax and administrative pressures they face in our dual economy.
The task now is to monitor their effectiveness and maintain the change momentum.
This article originally appeared in the Business Post on Sunday, 11 October 2026
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WARNING: The information in this article is not a recommendation or investment research. It does not purport to be financial advice and does not take into account the investment objectives, knowledge and experience or financial situation of any particular person. There is no guarantee that a financial or investment plan will meet its objectives. You should speak to your advisor, in the context of your own personal circumstances, prior to making any financial or investment decision.
WARNING: Tax information discussed in this article is provided for Irish Resident investors only by way of general guidance and is neither exhaustive nor definitive and is subject to change without notice, including potentially retrospectively. It is based on Davy’s understanding of Irish Tax legislation, as at [date]. It is not a substitute for professional tax advice. Please note that Davy does not provide tax advice. You should consult your own tax advisor about the rules that apply in your individual circumstances.
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