Finance (No. 2) Bill 2026: Key changes for business owners, investors and families

Finance (No. 2) Bill 2026 could have important implications for business owners and individuals making decisions about their wealth. Whether you are considering the sale of a business or investment, planning for succession, reviewing how you invest or looking at your property interests, a number of the proposed changes could affect those decisions.

Bitesize summary

Among the key measures in Finance (No. 2) Bill 2026 are a reduction in the general capital gains tax rate to 31%, increases to capital acquisitions tax thresholds and the proposed introduction of a new Individual Investment Account. Changes to investment taxation, Rent-a-Room Relief and Help to Buy may also affect personal financial and succession planning.

For business owners in particular, the changes provide an opportunity to revisit plans around business disposals, investments and transferring wealth to the next generation.

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Capital gains tax rate falls to 31%

One of the most significant changes for business owners and investors is the reduction in the general CGT rate from 33% to 31% for disposals made on or after 7 October 2026.

The new rate can apply to taxable gains arising from assets including company shares, business assets, investment property, development land and other investments.

While a two-percentage-point reduction may appear relatively modest, the difference can become significant on larger disposals.

For example, a taxable gain of €1 million would result in a headline CGT saving of €20,000 at the 31% rate compared with the previous 33% rate, before taking account of any exemptions or reliefs.

The lower general rate is also relevant where only part of a gain qualifies for retirement relief, revised entrepreneur relief or another CGT relief.

Business owners contemplating a sale or restructuring should therefore model the overall tax consequences rather than considering the headline CGT rate in isolation.

A new Individual Investment Account

The Bill proposes the introduction of an Individual Investment Account (IIA), which would provide a new investment structure for Irish-resident individuals aged 18 or over who have a PPS number.

From 1 July 2027, an individual will potentially be able to contribute up to €12,000 annually to an IIA and hold eligible assets such as regulated-market shares and bonds, UCITS, including ETFs, and certain insurance-based investments.

Under the proposed framework, the first €50,000 of the account's value will fall outside the new annual account tax. A 1% annual investment account tax will apply to the value above €50,000, calculated using daily average values.

Income, profits and gains from eligible assets within the account will not be taxed under the normal rules applying to the different investment products. Instead, they will fall within the specific IIA tax framework.

The IIA could therefore become another option for individuals building long-term investment portfolios.

However, the introduction of the scheme requires a commencement order. Investors should wait until its commencement and the final rules are confirmed before making decisions based on its proposed treatment.

Lower tax rate for funds and life policies

The tax treatment of a number of existing investment products is also changing.

From 1 January 2027, the tax rate applicable to many Irish investment funds, qualifying foreign life policies, Irish life policies and equivalent offshore funds will reduce from 38% to 35%.

Importantly, the rate reduction does not remove the deemed-disposal regime or other special rules applying to investment funds.

Individuals reviewing their investment strategy should therefore look beyond headline tax rates and consider how the overall tax treatment of different investment structures applies to their circumstances.

Higher inheritance and gift tax thresholds

The Bill also introduces increases to the lifetime tax-free thresholds for capital acquisitions tax (CAT) on gifts and inheritances taken on or after 7 October 2026.

The Group A threshold increases from €400,000 to €420,000, while the Group B threshold rises from €40,000 to €44,000. The Group C threshold increases from €20,000 to €22,000.

For families considering significant gifts, inheritances or the transfer of a family business, the increased thresholds should be incorporated into updated succession planning calculations.

The thresholds are only one part of effective succession planning. Available reliefs, the nature and value of the underlying assets and the timing and structure of a transfer can all have a substantial effect on the ultimate tax position.

Greater flexibility for business succession

The Bill also contains a technical but potentially important change relating to CAT business relief.

A merger or division that moves qualifying business property into a successor company will not, by itself, automatically be treated as a disposal triggering a clawback of business relief.

This may provide greater flexibility where a company needs to be reorganised following a gift or inheritance. However, the remaining conditions attaching to business relief will continue to apply.

For family businesses, this reinforces the importance of considering succession and future corporate structure together rather than treating them as separate exercises.

Property owners face both opportunities and new obligations

A number of measures will also affect property owners.

From 1 January 2027, the annual Rent-a-Room Relief exemption will increase from €14,000 to €16,000. Between 27 July 2026 and 31 December 2030, the relief may also apply to qualifying rooms in an auxiliary dwelling located within the grounds of an individual's main home.

For first-time buyers, the maximum Help to Buy relief will increase from €30,000 to €35,000 for qualifying contracts entered into, or first self-build mortgage drawdowns made, between 7 October 2026 and 31 December 2029.

However, the Bill also introduces a significant new measure for owners of certain vacant or unusable properties.

New 7% Derelict Property Tax

A new annual Derelict Property Tax of 7% of market value is proposed for certain properties and associated land that are not in use as, or suitable for use as, a home, business premises or trade premises.

Implementation will be phased, beginning with towns with populations of at least 4,000 before extending to towns with populations of at least 2,000 in the second year.

The first preliminary local authority register is due on 1 September 2027, with the first final register due on 28 February 2028. The first return and payment deadline is scheduled for 23 June 2028.

Specific exclusions, appeal mechanisms and deferral provisions are included. These can apply in circumstances involving matters such as recent purchases, remediation works and legal proceedings.

Property companies, developers and business owners holding vacant or unusable urban properties should therefore review their portfolios well ahead of the introduction of the new regime. Evidence relating to works, planning matters and the actual use of a property should be retained.

Personal tax changes from 2027

A number of income tax and USC changes will also take effect from 1 January 2027.

The standard rate band for a single person will increase to €46,500, while the single personal tax credit will increase to €2,125. The employee tax credit and earned income tax credit will also increase to €2,125, while the home carer tax credit will rise to €2,050.

The upper limit of the 2% USC band will increase from €28,700 to €30,300.

For owner-managers, sole traders and partners, the increase in the earned income tax credit is particularly relevant. However, the combined employee and earned income credits cannot exceed €2,125.

Time to revisit personal and succession planning

Taken together, the measures provide a useful opportunity for business owners and families to review their wider financial position.

Anyone considering the sale of a business or investment asset should update forecasts to reflect the 31% CGT rate while also examining whether any CGT reliefs are available.

Families considering gifts, inheritances or business succession should similarly update their calculations to reflect the increased CAT thresholds and consider whether business relief or other reliefs could apply.

The proposed Individual Investment Account and the reduction in the tax rate applying to many funds and life policies also make this an appropriate time for individuals to reconsider how different investment structures fit within their longer-term plans.

As Finance (No. 2) Bill 2026 may change before enactment, and some measures require commencement orders or have specific effective dates, advice should be obtained before taking action.

How Crowe can help

Tax decisions around selling a business, transferring wealth, investing or restructuring family assets rarely involve just one tax.

Our tax team can help business owners, investors and families understand how the measures in Finance (No. 2) Bill 2026 could affect their individual circumstances. This includes considering the interaction between CGT, CAT, income tax and available reliefs as part of wider business, investment and succession planning.

Taking a joined-up approach can help ensure that decisions made today support your longer-term business, financial and family objectives.

If you are considering selling or transferring a business, passing wealth to the next generation, reviewing your investments or restructuring family assets, talk to our tax team about the potential implications of the proposed changes.

Download our full summary of the Finance (No. 2) Bill 2026 here.