More than a third of Irish households had received an inheritance or a gift as of 2020, according to a study by the Central Bank which highlights the increasing importance of intergenerational transfers in Irish society.
The research estimated the value of inherited wealth in the State to be €97 billion (as of 2020) and to account for one sixth of the total net worth of the households in receipt of it.
Inherited wealth as a proportion of household wealth has been rising, with a greater proportion of households in 2020 inheriting wealth in the past 20 years than any time before this.
The study also found that households that received inheritances or gifts were “substantially wealthier” and tended to own more homes and businesses than households that did not inherit any wealth.
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The findings feed into a growing debate in Ireland and internationally about the role of intergenerational wealth transfers and whether they are driving greater levels of wealth inequality. Opposition parties here including Sinn Féin have been pushing for the introduction of a wealth tax.
In a report published last September, the Commission on Taxation said taxes on wealth and property in the Republic were too low and should be increased to broaden the tax base and protect the tax system from future challenges.
The Central Bank’s study noted that differences in demographics, the propensity to transfer between generations “and the evolution of wealth stocks and asset prices over time” accounted for the differences in the levels of inherited wealth across countries.
[ Wealthier families in Ireland four times more likely to benefit from inheritanceOpens in new window ]
It found that wealthier and older households here (those where the head of the household is aged 60 and over) are more likely to have received inheritances.
However, it also found that, in the Republic, inherited wealth represented a greater share of total net wealth for households in the middle of the wealth distribution than for the wealthiest households.
“As a result, our analysis shows that inheritances in Ireland contribute little to wealth inequality, and may even have reduced it over time, similar to findings for Britain and the United States,” it said.
