What to Do With Your Inheritance in Ireland: A Practical Financial Guide 

Receiving an inheritance is rarely straightforward. For most people, it arrives during one of the most emotionally difficult periods of their lives, and the pressure to make the right decisions with the money, often quickly, can feel overwhelming.  

Before anything else, it’s important to acknowledge that grief and financial decision-making do not make easy bedfellows. There’s no single right answer and what works for one person may not work for another. 

If you’ve recently received an inheritance or you’re expecting one and want to understand your options, this guide is for you. Below, we discuss some of the key questions you may have, in the hope of helping you to feel a little less lost. 

How is an inheritance paid out? 

How and when you receive your inheritance will depend on the terms of the will and the complexity of the estate.  

In many cases, funds are paid out as a lump sum once the estate has been fully administered. This can take anywhere from several months to over a year, particularly where there are properties to sell, debts to settle or multiple beneficiaries involved.  

In some cases, inheritance may be distributed in instalments or in a combination of cash and assets, such as property or investments. 

It’s worth knowing that any debts belonging to the deceased, including outstanding mortgages, loans or bills, are settled by the estate before funds are distributed to beneficiaries. What you receive is your share of what remains after those obligations have been met. This is usually administered by a solicitor. What you receive is your share of what remains after those obligations have been met. 

Once the funds are in your hands, one of the most sensible first steps is simply to park them somewhere safe while you get your bearings.  

A high-interest savings account or a notice account is a practical place to hold a lump sum in the short term. It keeps your money accessible and earning interest, without locking you into any long-term commitment before you’re ready.  

Most financial planners would advise taking at least three to six months before making any significant decisions. That breathing room isn’t wasted time; it’s the best way to ensure any decision you make is carefully considered and supportive of your financial goals. 

Tax considerations you should be aware of 

By the time funds reach you as a beneficiary, the estate will already have dealt with many of its own tax obligations. However, there are important tax considerations that apply to you personally going forward. 

Capital Acquisitions Tax (CAT) is the primary tax that applies to inheritances in Ireland. The rate is 33%, but crucially, there are tax-free thresholds depending on your relationship to the deceased.  

• Group A applies to children inheriting from a parent, with a threshold of €400,000 (as of 2025).  

• Group B covers other close relatives, with a threshold of €40,000.  

• Group C covers all other relationships, with a threshold of €20,000.  

Any amount above your applicable threshold is taxable.  

CAT return and payment deadlines can vary depending on your circumstances, so it’s best to speak with a tax consultant or accountant to confirm exactly what applies to you and by when. 

Please note that the above is general information only and does not constitute personal financial advice. Given the sums often involved in an inheritance, speaking with a qualified financial planner at this stage can be genuinely valuable in helping you make tax-efficient decisions. You can find out more about inheritance tax planning in Ireland here. 

What to do with your inheritance money 

Ultimately, what you do with an inheritance is entirely your decision. There’s no obligation to invest it, no pressure to be sensible with every cent and no rule that says you can’t spend some of it on something that matters to you.  

That said, when large sums are involved, or when the inheritance arrives unexpectedly, many people find that having a few guiding principles helps them feel more in control. 

The suggestions below are exactly that: suggestions. Everyone’s financial situation is different, and the right mix will depend on your income, your existing debts, your stage of life and your goals. A financial planning consultation is the best way to work out what actually makes sense for you. 

How to pay off debts with your inheritance 

If you’re carrying high-interest debt, clearing it is often one of the most financially rewarding things you can do with a lump sum.  

Credit card balances, personal loans, overdrafts and car finance can carry interest rates that are very difficult to outperform through investing. Wiping those out provides an immediate, guaranteed return in the form of interest you no longer have to pay. 

Beyond high-interest debt, it’s also worth considering your mortgage. Overpaying your mortgage reduces the total interest you pay over the life of the loan and can shorten your term significantly. However, whether this is the best use of your funds depends on your mortgage interest rate, your age and your other financial priorities, which is another reason why personal advice really earns its place here. 

You might also use this moment to top up your emergency fund. Having three to six months’ worth of living expenses set aside in an accessible account gives you a financial buffer that means you’re less likely to need to dip into investments at the wrong time. 

How to save your inheritance 

If you’re not yet ready to invest, or if your goals are shorter-term, saving is a perfectly valid option. Fixed-term deposit accounts and notice accounts in Ireland can offer more competitive rates than standard current accounts and keeping your funds here while you take time to plan is sensible, not passive. 

If you’ve received a significant windfall and want to gift some to family members, it’s worth knowing that the Small Gift Exemption allows you to give up to €3,000 per person per year free of CAT. This can be a useful, tax-efficient way to pass on some of the benefit to people you care about. 

How to invest your inheritance 

For those with a longer time horizon and goals that go beyond a lump sum sitting in savings, investing may be worth exploring. An inheritance can act as a meaningful foundation for long-term wealth, whether that is investing for retirement, for a child’s future or simply for financial independence. 

Before putting money into markets, it’s worth considering your pension first. Additional pension contributions can be highly tax-efficient, as contributions attract income tax relief at your marginal rate. Depending on your age and existing pension provisions, this could represent one of the most effective uses of a lump sum. 

Beyond pensions, there are a range of investment options available, including funds, equities and other asset classes, each with different risk profiles and timeframes.  

What matters most is that any investment strategy aligns with your personal goals, your attitude to risk and your timeline. A dedicated investment consultation is a good starting point for anyone considering this route. 

One final note: try not to rush into property or other large, illiquid purchases in the immediate aftermath of receiving an inheritance. It can feel like the most obvious use of a significant sum, but property decisions carry their own costs, risks and commitments. Give yourself the time to consider all of your options before making a move you cannot easily reverse. 

Disclaimer  

This article is for general information purposes and is not an invitation to deal or address your specific requirements. Any expressions of opinions are subject to change without notice. The information disclosed should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future