IrelandCan I set up a discretionary trust for my family?
Yes, you can set up a discretionary trust for your family in Ireland, but it may trigger Capital Acquisitions Tax (CAT) liabilities for beneficiaries and requires careful drafting to comply with tax and trust law.
What the Law Says
The Capital Acquisitions Tax Consolidation Act 2003 governs tax treatment of trusts, including discretionary trusts, in Ireland. It defines how benefits received by beneficiaries from such trusts are taxed — even though beneficiaries have no fixed entitlement.
A discretionary trust is a legal arrangement where trustees hold assets and decide — at their discretion — whether, when, and how much to distribute to beneficiaries. Unlike fixed-interest trusts, beneficiaries have no automatic right to income or capital.
Under Irish tax law, distributions from discretionary trusts are treated as taxable 'benefits' under Capital Acquisitions Tax (CAT). The beneficiary is liable for CAT on the value received, subject to applicable thresholds and rates.
The CAT Act does not prohibit setting up discretionary trusts, but it imposes specific valuation and reporting rules — especially for 'relevant property' held in trust and for distributions made to beneficiaries.
Statutory TextCapital Acquisitions Tax Consolidation Act 2003 s. 2:
— Capital Acquisitions Tax Consolidation Act 2003, s. 2 — Interpretation
What to Do
Consult a solicitor experienced in Irish trust and tax law to draft the trust deed correctly.
Ensure the trust deed clearly states its discretionary nature and complies with the Trustee Act 1893 and common law principles.
Register the trust with Revenue’s Register of Beneficial Ownership (if required) and file CAT returns for any distributions.
Keep detailed records of all trustee decisions and distributions for tax compliance.
Review CAT Group A threshold (€335,000 in 2024) and lifetime limits when planning distributions.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.