Charities could see legacy gifts treble by 2050 with modest tax reform.
A modest reduction in Capital Acquisitions Tax (CAT) could significantly boost charitable giving through Wills in Ireland, according to My Legacy, a coalition of over 90 Irish charities.
The group is urging the Government to introduce a 3 percent CAT cut ahead of International Legacy Giving Day on 13 September.
“With the relatively low rate of legacy giving in Ireland, without incentives, we could be seriously short-changing Irish charities in potential income and support”
Legacy giving currently accounts for just 3 percent of overall income for Irish charities. My Legacy believes that reducing the CAT rate from 33%t to 30% for beneficiaries of a Will – when 10% or more of the estate is left to charity – could more than treble legacy gifts by 2050.
Substantial impact
Niall O’Sullivan, Chair of My Legacy, said the potential impact is substantial.
“Currently, legacy giving in the UK, where tax incentives are in place, generates £4.5 billion annually from probated legacy bequests. That’s nearly 60 times more than in Ireland, despite the UK economy being just over 10 times larger,” he said.
“The current annual value of charitable bequests in Ireland is around €90 million. With increasing private wealth and an aging population, we could expect that figure to increase substantially in the next 25 years. But with the relatively low rate of legacy giving in Ireland, without incentives, we could be seriously short-changing Irish charities in potential income and support.”
O’Sullivan cited RED C research commissioned for My Legacy Month in 2024, which found that 35 percent of respondents would consider leaving a bequest to charity if a tax break were available.
“Tax incentives would also encourage professional advisors to discuss philanthropy with clients. Legacy gifts provide sustainable, generally unrestricted income for charities, enabling strategic planning and addressing unmet needs. Our members provide essential social good across every aspect of Irish society. With increasing competition for traditional funding streams and growing demands on their services, this legislative change is a no-brainer for the government to introduce,” he said.
My Legacy also believes the proposed tax change would raise public awareness about the importance of making a Will and encourage more conversations around charitable giving.
Susan Murphy, Solicitor and Board Member at My Legacy, said misconceptions around wealth often prevent people from considering legacy gifts.
“I’ve experienced many times with clients a misconception that in order to leave a gift in their Will, they must be very wealthy. People often underestimate how much they are worth and how much their estate will amount to once property, benefits, insurance and pensions are accounted for,” she said.
“But no matter how much an estate is worth, even an amount of a few hundred euro can be worth a lot to a charity. When scaled up across the population, an incentivising tax break to encourage people to consider including a gift in their Will could make a huge difference to our member organisations in the future.”
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