Technical article

Ireland: Why the Tax Turns on the Settlor, Not the Heirs

The settlor's own address sits at the centre of the rule, and so does anything the trust owns in Ireland.

By Neil Solomon · 3 min read

Picture a family in Australia whose trustee lives in Dublin. The settlor lives in Sydney. The children live in Canada and France. Nobody in the family has ever lived in Ireland. The question is simple: does Ireland tax this trust?

Most places we have looked at turn on the heirs. Ireland turns on the person who made the gift.

The Irish charge

Ireland has a Discretionary Trust Tax. Revenue Ireland (tier A) describes it as a once-off initial charge of 6% on the trust assets, and then 1% each 31 December on the value of all trust assets. A form, DT1, is due within four months of setting the trust up. The same page speaks of settlors who are resident or ordinarily resident in Ireland. That wording points at the settlor.

The law firm Matheson (tier B, 2025) says the tax falls on the trustees and is usually triggered on the settlor's death. It adds that offshore trustees have faced the charge on Irish assets even when no settlor or heir had an Irish link.

An example shows the size. Take a trust of EUR 1,000,000 (about US$1.1 million), which is a round example and not a real case. The initial charge is EUR 60,000, once. The yearly charge is EUR 10,000 after that.

When it does not apply

A 2009 commentary in a financial-centres journal (tier B) covers the case in our picture. It looks at a trust with a non-Irish settlor, non-resident beneficiaries, no Irish property and Irish professional trustees. It finds no inheritance and gift tax, no Discretionary Trust Tax and no Irish capital gains tax. It also says Revenue generally will not assess income that is mandated to non-residents. The same piece says Irish-resident trustees pay 20% income tax on income they receive, with a surcharge on income that builds up, unless not all the trustees live in Ireland. That piece is old, and the rates may have changed.

Ireland's tax on gifts and inheritances is called capital acquisitions tax. It falls on the person who receives. PwC's quick chart (tier B, reviewed to September 2026) shows 33% as the top Irish rate. Matheson notes one wrinkle: trusts set up before 1 December 1999 by Irish-domiciled settlors stay inside that tax whatever the beneficiaries' residence.

Four situations side by side

What this touches

The settlor carries the main weight, since the settlor's home decides the charge. The trustee files the form. The children are touched only if one of them later receives something while living in Ireland, or if the trust holds a house or land there.

You might say: "My children do not live in Ireland, so I am fine." That could be right, and the 2009 commentary points that way. The settlor's own address sits at the centre of the rule, and so does anything the trust owns in Ireland. A settlor who moves to Ireland later, or a trust that buys a flat in Dublin, changes the answer.

You could ask a trustee in Ireland three things. Where does the settlor live for this purpose? Does the trust own, or plan to own, anything in Ireland? What does the DT1 filing look like in their file for a trust like ours?

Has a trustee ever told you a rule that depended on a person other than the heirs? Share it here. It may help another family sitting where you sat.

Figures are estimates for planning, based on public data. Date read: October 2026.