Oireachtas Joint and Select Committees

Wednesday, 6 November 2019

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach

Finance Bill 2019: Committee Stage (Resumed)

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 76:

In page 84, between lines 22 and 23, to insert the following: “Report on Capital Gains Tax exemption or reduction

38.The Minister shall, within 6 months of the passing of this Act, prepare and lay before Dáil Éireann a report on a possible Capital Gains Tax exemption or reduction in cases where a carer moves into a relative’s home to care full time and ultimately, following the death of this relative, moves into the home full time and sells their original home.”.

We just dealt with how €27 billion of assets in the funds are exempt from CGT. This amendment proposes to consider others who are affected by CGT following the sale of what would have been their principal private residence. I raised this with the Minister last year and he asked me to withdraw the amendment. He said he would consider options in respect of it and would publish as part of the tax strategy group papers in the summer. My understanding is it was not part of the tax strategy group papers that were published.

The Minister can correct me if I am wrong in this. The issue is where a family member moves into the old family home to care for a parent as a carer and when they then go to sell the home they occupied - their primary principal residence - they are levied with CGT for the portion of the non-occupancy of that house. There is a question over fairness and the role of carers and whether CGT should apply in these cases because they would be still living in the principal private home if it were not for the fact that they moved into the family home as a full-time carer for a parent or perhaps a sibling.

I believe this is worthy of consideration. Nothing has been done on the matter. Obviously, it is not a widespread issue, but for those who have provided that role and moved into the family home, and then are disposing of their previous residence, it is quite harsh to require Revenue because of the tax code to subject them to CGT on the portion of the gain for the period of non-occupancy. CGT is not levied in its entirety but it is levied on the gain during the period when the house was unoccupied.

Let us consider for example, a daughter who gives up her family home and moves in to care in a full-time capacity for her mother. Her mother passes away and the daughter continues to reside there; perhaps the family home is bequeathed to her. She then disposes of her previous accommodation and therefore is hit with a CGT bill. If she had remained in her family home, did not provide the care for her mother, did not leave her house and move into her mother's home to care for her - if she just stayed in her primary principal residence and inherited her mother's house - she would not be subject to CGT on disposal of her original primary residence.

There is an issue in fairness that needs to be dealt with in the Finance Bill. As I said, I raised this last year and it was to be examined, but I have not seen whether that was published in the tax strategy group papers in the summer.

Comments

No comments

Log in or join to post a public comment.