Noel Grealish (Galway West, Independent) | Oireachtas source

The programme for Government promises to highlight inequalities and implement policies to do better by people. There is a sizeable group of people in this country who are suffering from inequality that follows them even when they have passed away. Today, I am asking the Tánaiste to tackle the unfairness of the situation that arises when a person who does not have any children of their own dies and leaves their house to a close family member. Currently, the child of a parent who dies does not pay tax on the first €335,000 of the value of what he or she inherits, but a beneficiary who is not a direct descendent, such as a nephew or niece, only enjoys a fraction of that tax-free allowance, even though he or she may have been the closest person to the deceased for decades.

According to a report by Daft.ie based on prices for the first quarter of this year, in Galway city the average asking price for a house is more than €335,000, while in Dublin it is well over €400,000. I will use the example of a house whose value is in between those figures, at €350,000, that has been left to a niece who has been unfailing in looking after the needs of her uncle or aunt for years, perhaps running messages, visiting them every day, bringing them to medical appointments and taking them on social outings, demonstrating a true family bond. The first €32,500 is tax-free, which is less than one tenth of what the house is worth. The niece will have to pay tax at the rate of 33%, or one third, on the remaining value of the house. That means that the niece must pay capital acquisitions tax amounting to more than €100,000. There are some very limited exemptions from inheritance tax for a favourite niece or nephew in certain situations, but they are very restricted.

Our current inheritance rules are effectively punishing people for not having children of their own. I am sure the Tánaiste will agree that that is wrong. These people have worked all their lives and have paid all their taxes, just like people who have become parents. In fact, those who have never married will have paid much more tax, having borne the brunt of our taxation system as single people who are doubly penalised. It is worth noting we have gone backwards in relation to tax-free thresholds. Until 2009, the tax-free allowance for a niece's or nephew's inheritance was more than €54,000.

I have in the past suggested changing the rules relating to a family home in pre-budget submissions to the Minister for Finance. My question to the Tánaiste is simple. Will the Government commit to changing this grossly unfair taxation regime when forming the next budget?

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