Thursday, 22 September 2022
Ceisteanna Eile - Other Questions
100. To ask the Minister for Finance if consideration will be given to increasing inheritance tax thresholds given the increase in house prices; and if he will make a statement on the matter. [46185/22]
Thank you, a Chathaoirligh, for facilitating the question, which I am taking on behalf of Deputy Colm Burke. In fact, I take it on behalf of many people with a strong interest in the answer to this question on inheritance tax thresholds having regard to the progressivity of the income tax and local property tax systems and the rise in house prices. What is the Minister's view on that following this week's commission on taxation report?
I thank the Deputy for raising this important matter. As she is aware, capital acquisitions tax, CAT, is a tax which applies to both gifts and inheritances. The relationship between the person giving a gift or inheritance and the person who receives it determines the maximum amount, known as the "group threshold", below which CAT does not arise.
As Deputy Carroll MacNeill will be aware, I am not in a position to indicate any decisions that I am going to make in a detailed way in advance of the budget but, in responding to the proposals by the Commission on Taxation and Welfare, I did make very clear that in general I do not have any plans to increase the amount of inheritance tax people pay at the point at which inheritance takes place.
I fully appreciate how sensitive a matter this is for many families. I appreciate that at moments of death and difficulty within families these issues are sensitive and we need to be fair to them. In general, that is my view on the matter. I made this clear when the commission's report was published last week. The Deputy will appreciate and understand that, for now, I cannot go any further than that in terms of any detailed responses I might make, in particular in light of the changes that are happening in the value of homes in recent years.
I thank the Minister for his response. I sometimes wonder with the reporting of this whether people really understand who is concerned about it and who is bothered by it. It is as if it is all millionaires and billionaires that are somehow going to benefit from this. I keep thinking about a woman just off Johnstown Road in my constituency, who has paid off her mortgage with income after tax. Her husband is a mechanic. She has not had any change in her car since 2007. She has two daughters that she has put through college and supported with their education, who are now earning salaries as nurses and working extremely hard in hospitals in Dublin while living in Wicklow. What she is concerned about is making provision for her family. It is a very primal sort of concern. She has said to me she is not a rich woman, she is not flaithiúlach with her money in any way. She is a woman who has worked hard. She has never received nor sought anything from the State. She has put every penny she has into her family's education and making and providing a home for them. Her concern now is not her daughters' concern at the point of her death, but her reconciliation with herself that she has made provision for them. The questions around inheritance tax deeply upset people. They imagine that there will be some enormous change. People have a deep, primal feeling about how they make provision for their children, and them being stable, and they are concerned about that. That is why this debate is so important.
I thank the Deputy very much. I take her point that there are citizens who worked hard in their lives, in particular those who worked at a time when tax rates were far higher than they are now and when interest rates on the properties to which Deputy Carroll MacNeill refers were far higher than they are today or may even become. As people do all of that, they begin to think about their children and other family members. This is a very important decision for them. That is why I am pleased to confirm yet again to the Deputy that, in general, I am not planning any significant changes in this area at the moment. Any detailed matters in regard to this issue, as always, await budget day and the decisions we make. The point the Deputy makes to me this morning is well made. I know so many families, as do all Members of the House, who have worked hard during their lives and are now thinking about the future and what decisions they may have to make. I understand the point the Deputy makes.
It is an altruistic position because, as the Minister says, what a person is trying to do is make decisions in the best interests perhaps not of themselves but of their children and helping them to plan their lives. As the Minister says, these mortgages are paid off after tax from net income with tax rates extremely high and with no other source of support from the State. It is about being able to give certainty to people at a time of deep uncertainty, which we have had through Covid and that is of unknown duration. People can cling to something that is certain, which is that they have paid off their mortgage and they know they have done that. To be able to care for and make provision for their children, but not always other family members, is a very primal concern. I thank the Minister for his response. It will give important comfort to the type of people whom I have described who have worked extremely hard in this State as teachers, nurses and in various professions - the ordinary people of Ireland who have paid off their mortgages and who genuinely are concerned about this issue.
I thank the Minister for his response and the reassurance that the capital acquisitions tax will not rise in the budget. I cannot better what Deputy Carroll MacNeill has had to say in terms of the position that a relatively small number of people in the State find themselves. Having paid extortionate interest rates in the 1980s and high taxation, among other concerns, they want to support the future of their children when they pass.
I am not a fan or a supporter of this sort of taxation but I recognise it makes a valuable contribution to the Exchequer. I was heartened by the comments of the Minister at the debate on the Commission on Taxation and Welfare report last week and I appreciate the opportunity to contribute at this point.