Personal tax in Finance (No.2) Bill 2026

With the focus on the introduction of the new investment accounts in the Budget, it was no surprise that additional changes in relation to personal tax were relatively limited.

Finance (No. 2) Bill 2026 contains the provisions required to effect the Budget Day announcements, together with a small number of additional targeted updates.

The key additional measures address the treatment of donations to national governing bodies for sport, several farming reliefs and the capital acquisitions tax exemption for payments made for a child’s support, maintenance or education.

Cian Liddy

Partner

KPMG in Ireland

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Donations to national governing bodies

The Bill proposes a number of changes to the tax relief available for donations to certain national governing bodies (NGB) and approved fundraising bodies.

The Bill introduces a new mechanism allowing a NBG to establish a fundraising company (referred to as an approved fundraising body) to receive qualifying donations and associated tax relief in respect of qualifying projects undertaken by the NGB, subject to specified conditions.

The Bill introduces an annual limit on tax relieved donations made by an individual of €1 million, or where the donor is associated with the NGB or the approved fundraising body, 10% of the donor's total income for the relevant year.

The Bill also proposes two measures in relation to donations to national governing bodies to align their treatment with those applicable to other donations to charitable or sporting bodies.

Domicile levy calculation

The Bill proposes a technical amendment to the calculation of worldwide income for domicile levy purposes. As readers will recall, a domicile levy liability arises where an individual’s ‘worldwide income’ for a calendar year exceeds €1 million, and certain other conditions apply.

The definition of worldwide income begins with the income measured for income tax purposes, subject to specified adjustments for domicile levy purposes.

The Bill introduces a further adjustment to prevent donations to NGB or approved fundraising bodies being deducted in calculating worldwide income.

High Income Earner Restriction

A related amendment adds donations to NGB or approved fundraising bodies to the specified reliefs covered by the High Income Earner Restriction. As a result, relief for a qualifying donation will be taken into account together with the individual's use of other specified reliefs in applying the restriction.

Therefore, the availability of income tax relief for a qualifying donation must be considered together with the individual’s use of other specified reliefs, rather than viewed in isolation.

Both changes are proposed to apply from 1 January 2027.

Farming measures

The Bill includes several measures for the farming sector. They cover capital allowances for safety and adaptive equipment, succession farm partnerships, farm consolidation relief and updates arising from the European Union Agricultural de Minimis Regulation.

Safety and adaptive equipment

Accelerated wear and tear allowances for qualifying capital expenditure on certain farm safety equipment and adaptive equipment for farmers with disabilities are extended to 31 December 2029.

The Bill also adds a further 12 categories of equipment to the list of qualifying equipment, including mobile cattle crushes, mobile sheep handling equipment, protective fencing around an existing slurry tank, and a safety agitation platform for existing slurry tanks.

Succession farm partnerships

The Bill proposes to remove the existing three-year holding requirement applying to farm assets that are to be transferred to a succession farm partnership under the initial partnership agreement in order to qualify for relief. This change applies where an application to register as a succession farm partnership is made on or after 1 January 2027.

Participants in succession farm partnerships are currently entitled to an annual tax credit of up to €5,000 per partnership for five years. The Bill proposes to increase this annual tax credit to €10,000 for succession farm partnerships registered on or after 1 January 2027.

The date on which a succession farm partnership is registered will therefore be important in determining the amount of credit available. There is no corresponding increase to the credit available to participants in a succession farm partnership registered before that date.

The related clawback provisions are also proposed to be amended to ensure that Revenue can recover the full amount of the increased relief where a proposed transfer does not proceed. The clawback remains limited to the amount of tax credit received.

Farm consolidation relief

The Bill introduces technical amendments to the stamp duty relief provisions for farm consolidation.

One amendment ensures that where the value of qualifying farmland sold exceeds the value of qualifying farmland acquired, the calculation of the stamp duty payable cannot produce a negative amount.

A further amendment ensures consistent treatment where farmland is acquired before the related disposal takes place, so that the operation of the relief does not depend on the order in which the qualifying acquisition and disposal occur.

Both changes are intended to put Revenue’s existing administrative practice in this area on a statutory footing.

European Union de minimis rules

A European Union regulation adopted in 2025 amended the Agricultural de Minimis Regulation. The Bill proposes consequential amendments to two Irish provisions relating to registered farm partnerships and stamp duty relief for long term leases of farmland, updating the references to the Agricultural de Minimis Regulation to reflect the 2025 amendment.

Capital acquisitions tax support exemption

The Bill makes a welcome change to the capital acquisitions tax exemption for amounts provided for the support, maintenance or education of a child following the death of a parent. Under the existing provisions, this exemption is only available where both parents are deceased.

The Bill proposes that the exemption will apply to qualifying support, maintenance or education provided following the death of one parent, notwithstanding that the child's other parent remains alive.

The other existing limitations on the scope of the exemption remain. In broad terms, the exemption applies to minor children, children aged over 18 but not more than 25 who are receiving full-time education, and children who are permanently incapacitated from maintaining themselves, regardless of age.

The support, maintenance or education must be consistent with the normal expenditure of a person in the circumstances of the deceased parent immediately before death and reasonable having regard to that parent's financial circumstances immediately before their death.

Get in touch

The measures unveiled in Finance (No.2) Bill 2026 will have far-reaching implications for businesses across Ireland. If you have any enquiries, comments, or wish to explore further, we are here to assist.

Contact Cian Liddy of our Tax team today.