Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

We discussed this on Committee Stage. It would be helpful if the Minister of State could clarify the type of payments that would be permissible from parents to grown-up children who are living at home and are no longer covered by the exemption. It has been clarified that the change does not capture board and lodgings. I suspect that the origin of this change in the legislation lies with the Revenue Commissioners. I have great regard for them and assume they have identified a pattern of abuse which leads to this change. If wealthy parents dole out tens of thousands of euro to Johnnie every year to circumvent the lifetime threshold that loophole should be closed off. The Minister of State needs to clarify the type of payments that will be permissible under the new regime as proposed. He tabled an amendment on Committee Stage to deal with ongoing payments in respect of a grown-up child with a disability, a mental or physical incapacity. That was warmly welcomed.

A bigger issue is that over the past few years the threshold of the allowable lifetime gift from a parent to a child has been reduced by 60% to €225,000 and the rate of capital acquisitions tax has gone up from 20% to 33%. For many families when a house is passing from one generation to another a very substantial inheritance tax liability would be triggered which will force the sale of the property to settle the tax liability. That is a separate issue and I agree with Deputy Creighton that the threshold should be index-linked again. That would be a very modest change. In respect of the amendments tabled, if the change by the Government is to close a loophole that is being abused I am all for it but it would be helpful if the Minister of State could clarify exactly which type of payments will continue being allowed and will not fall foul of the new regime.

See this speech in context