Section 72 Policy

This is a whole of life policy used use for inheritance tax planning.

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A Section 72 policy gives you the opportunity to put a plan in place for those who are closest to you. As assets, such as the family home increase in value, inheritance policies such as Section 72 are becoming increasingly important.

What is a Section 72 policy?

A Section 72 is a Revenue Approved, Whole of Life Insurance policy taken out from which the proceeds can be specifically used to pay Capital Acquisitions Tax (CAT). It may also cover a tax liability from a post-retirement pension vehicle, such as funds inherited from Approved Retirement Fund (ARF).

The premiums for a Section 72 policy will be paid by the insured person during his or her lifetime.

In most cases, such a policy is taken out by parents to pay for their children’s inheritance tax bill. It works similar to any regular life insurance policy, you pay the premiums and, on your death, the beneficiaries receive a tax-free lump sum.

Please Note 📌

A Section 72 policy must be taken out and paid by the person who is leaving the inheritance.

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Why a Section 72 Policy is important?

A son or daughter threshold will cut off at €335,000, meaning your offspring will pay tax at a rate of 33% on everything inherited over this amount. With house prices almost at an all-time high and continuing to rise, this threshold may be significantly less than the value of your estate.

For example, a €550,000 house in Dublin is not uncommon. If this was left to one child, the inheritance tax bill would be €70,950. This is a large sum of money and may be difficult for many to find.

Although a Section 72 policy will not be everyone, if you plan on leaving substantial assets such as property, cash, shares, or land, it may be worth having a conversation with an advisor.

Benefits of Inheritance Tax Planning

If you plan on leaving assets to someone other than a spouse or civil partner, there may be significant tax implications.

A Section 72 policy can be used to offset tax liability. A ‘Section 72’ is a specific type of Life Insurance policy approved by the Revenue Commissioners.

The amount of cover required will depend on your personal circumstances. At emero, we specialise in inheritance tax planning. If you would like to discuss your potential options, please contact our team.

Long term cover

Peace of mind

Efficient inheritance planning will allow you peace of mind knowing a plan has been put in place.

Tax efficient cover

Protect your beneficiaries

A Section 72 policy means you can pay the premiums so that those left behind will not have significant tax implications.

Monthly payments

Assets can be kept

Without a large inheritance tax bill to pay, your beneficiaries may keep the assets most important to them.

Section 72 - Revenue stipulations

When taking out a Section 72 policy, Revenue has a list of strict rules that must be adhered to. These include:

Contact our team

At emero, we specialise in helping clients looking to pass on assets in a tax-efficient manner.

Below we have outlined different aspects of Inheritance tax planning that should be considered in more detail.


Editorial Staff

Last Update: Aug 2022

What is the maximum age you can apply for a Section 72 policy?

The maximum age you can apply for a Section 72 policy is age 74.

How much can you inherit tax-free in Ireland?

The maximum you can inherit tax-free in Ireland is €335,000 from a parent. Anything above this threshold will be liable to Capital Acquisitions Tax (CAT). 

The tax rate on anything inherited above these thresholds is 33%.

None of us enjoy paying taxes, particularly when we are inheriting from a family member.

However, there are rules and regulations that must be adhered to.

In 2021, the Irish Government collected approximately €522 million in inheritance tax.

inheritance tax ireland

The tax rate on anything inherited above these thresholds is 33%.

This can lead to significant inheritance tax liabilities and not just for the super wealthy.

Capital Acquisitions Tax explained

Capital Acquisitions Tax (CAT) is a tax that applies to gifts and inheritances.

If you receive a gift or inheritance, you may have a tax liability which must be paid. These both fall under the category of Capital Acquisitions Tax (CAT). If the gift  or inheritance is over a certain threshold, tax must be paid.

As we see below, the level of threshold that is applied will depend on your relationship with the disponer (the person giving the gift or inheritance)

Current Capital Acquisition Tax (CAT) thresholds in Ireland

For the purpose of Capital Acquisition Tax purposes, people are split into three different categories. These are categories are:

  • Group A – This is a son or daughter of the disponer. A ‘child’ also includes a stepchild and foster children in certain circumstances.
  • Group B – This includes siblings and grandchildren.
  • Group C – This applies to all who fall outside the category of Group A or Group B.

There is also a 16% chance of suffering a serious illness and a 5% chance of death before age 65.

Below we look at the specific thresholds and the relevant amounts.


Group A

Group B

Group C

On or after October 9th 2019




10th October 2018 – 8th October 2019




12th October 2016 – 9th October 2018




The table above illustrates some of the changes to the tax-free thresholds in recent years. Anything inherited above these thresholds will be liable to tax at a rate of 33%.

Capital Acquisitions Tax (CAT) examples

Capital Acquisitions Tax (CAT) is becoming a reality for more people as house prices rise across Ireland. It is now uncommon to see a property below the value of the Group A threshold particularly in our larger cities.

Below we look at some examples of Capital Acquisitions Tax (CAT) within the different thresholds and look at what tax liabilities may arise.

Case Study 1

Mary was left a house by her parents to the value of €1,700,000.


Value of inheritance



Tax Liability






Case Study 2

Brian was left part of his parent’s estate which amounted to €2,500,000


Value of inheritance



Tax Liability






The above illustrate the significant tax bills that could be due by those inheriting from their parents.

Small gift exemption

Each person is entitled to receive a gift up to the value of €3,000 from any person in any calendar year without having a Capital Acquisitions Tax (CAT) liability.

This small gift tax applies only to gifts and not inheritances.

How much does a Section 72 policy cost?

Section 72 policies are on the side of the more expensive insurance policies. However, the exact cost will vary depending on your situation.

Like most things involved in financial planning, there is no one-size-fits-all solution.

There are certain variables as with most life insurance policies that will have a direct impact on the price of your premium. These include your:

  • Age
  • Smoker status
  • Previous health issues
  • Amount of cover needed

Aspects such as smoking will significantly increase the price of your premiums. Any history of health conditions may add some complications to your application process.

How much will I need to cover?

As the purpose of a Section 72 policy is to cover the inheritance tax that will be owed, calculating the cover needed should be relatively straightforward.

Your children will fall into Group A meaning they will have a threshold of €335,000 each. Using these thresholds, you can calculate the tax liability they may be left with.

From here you can calculate the policy needed to ensure the inheritance bill will be covered on your death.

It may be worth discussing your situation with your Financial Broker.

Where can I arrange a Section 72 policy?

There are five main life insurance companies in Ireland. Of these, only three currently offer Section 72 policies.


Offer Section 72 plans

Royal London




Irish Life




New Ireland


A Section 72 policy is not a simple policy to advise on. There are many variables that will need to be accounted for and each person has a different set of circumstances.

However, we have experience guiding clients through this process and would be happy to assist.

Can children pay for the Section 72 policy?

No. The Section 72 premiums must be paid by the person who owns the policy.

Although, there is an option to take out a whole of life insurance policy on a parent. If the ‘child’ pays the premiums, then they will inherit the proceeds of the policy tax-free.

These proceeds could potentially be used to pay any inheritance tax liabilities that may arise.

However, insurable interest must be taken into account if a ‘child’ is considering taking a policy out on a parent. This means the life insurance company must give you permission to take out such a policy.

Benefits of Inheritance tax planning

The core focus and major benefit of inheritance planning is it allows you to pass wealth onto the next generation in a tax-efficient manner.

Neglecting to put a plan in place can leave a significant and costly burden on those left behind.

Other benefits of inheritance planning include:

  • Peace of mind as you know there is a plan in place to deal with your estate.
  • It gives you the opportunity to understand the value of your estate more comprehensively.
  • All parties involved are aware of the process that is to be followed, reducing the risk of disputes.
  • Help loved ones plan for their future.
  • Minimise potential tax liabilities.

A combination of the above makes planning for potential inheritance a worthwhile exercise. With a Section 72 policy, this gives you a specific plan that can be used.

Is there anything else I should consider?

If you are considering a Section 72 policy as an option, it would be advised to speak with someone experienced in the process. Our team has guided clients through the process and can answer any questions you may have.

A holistic look at your overall financial situation is important. A Section 72 policy may also not be the best course of action. Perhaps there are other avenues that should be explored.

If you are contemplating a Section 72 policy, your estate is likely of a significant value. Take time to ensure it is passed on in the most tax efficient manner possible.

As no two situations are the same, we do offer a complimentary consultation to chat through any questions you may have. It also gives us an opportunity to assess your situation and help determine if a Section 72 policy may be required.

If you would like to book a no-obligation chat, feel free to contact our team through any of the below channels.

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