Fostering has, until relatively recently, been treated as the forgotten child in Irish tax law, especially when it comes to inheritance. The good news is that this is no longer the case and your grandchild should be treated as your child for inheritance tax purposes.
Traditionally, the State baulked as treating foster children in the same way as other children in tax terms, considering them instead as “strangers in blood” and therefore entitled only to the lowest tax-free allowance on gifts and inheritances. There was also concern that the “precise legal definition of long-term foster care may also prove difficult to answer”.
That means foster children are now treated in the same way as any other child – subject to the highest inheritance-tax exemption, currently €335,000 under Category A – as long as certain rules are observed. And I cannot see any of these being an issue for you.Assuming this is an informal fostering arrangement – ie not organised through Tusla – your granddaughter must have lived with you for a total of five years up to the age of 18.