Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Deputy Burton has proposed that a report on the gifting, tax-free, of valuable properties from parents to their children within the conditions of the current dwelling house exemption provision be prepared and laid before the Dáil. Earlier this year Revenue carried out an investigation into the use of the exemption as a form of tax-efficient wealth transfer. Following on from the results of this investigation, I put forward an amendment on Committee Stage, introducing what is now section 51 of the Bill, which will put an end to such arrangements by restricting the exemption to inheritances of dwelling houses. Parents will no longer be able to gift properties to their children and qualify for the exemption unless that child is a dependent relative, as defined. Children can, however, continue to inherit the family home and avail of the dwelling house exemption. In the circumstances, there is nothing to be gained by producing a historical report.

We have accepted there is a loophole and, on the advice of Revenue, we are closing it in section 51 of the Bill, which was debated fully on Committee Stage and referenced on Report Stage today. The reason I did not act earlier was because I wanted to establish the facts. I asked Revenue to do a review and it did a review and found there was some abuse. For example, I have a note here which says 14 of the properties gifted to children over the five-year period exceeded €1 million in value. One donor gifted separate properties to four of his children which were valued at €1.7 million, €1 million, €800,000 and €700,000, respectively. This happened between 2011 and 2013. There was abuse. When the abuse was identified and quantified and the Revenue came up with a suggestion on how to deal with this, we moved to close the loophole. It is closed by section 51 of the Bill before us.

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