Seanad debates

Wednesday, 10 December 2014

Finance Bill 2014: Committee Stage

 

1:30 pm

Photo of Feargal QuinnFeargal Quinn (Independent) | Oireachtas source

I move recommendation No. 6:


In page 100, to delete lines 11 to 21 and substitute the following:“(i) the spouse or child of the disponer or of the civil partner of the disponer, or
(ii) a person in relation to whom the disponer stands in loco parentis,”.
We are back on this topic again. On Committee Stage in the Dáil the Minister introduced an amendment to section 82 of the Capital Acquisition Tax Act 2003.

The objective of that was to impose an age restriction on parents giving gifts to their children without being subject to capital acquisitions tax. Under section 81 of this Bill the Minister proposes to limit the availability of this capital acquisitions tax exemption to children who are under 25 and in full-time education.

There will be real difficulties with what the Minister is proposing and I urge a rethink. There are many circumstances in which parents continue to provide support and maintenance to children who are over 18 and not in full-time education. Are we going to see 18 year olds being liable for capital acquisitions tax for the bed and board they receive in their homes? In the current economic climate there is no shortage of instances where children remain living with their parents long after they reach adulthood. The affordability of rental accommodation has not helped and the Central Bank proposal for 20% mortgage deposits will hardly help either. During the recession we heard of many instances where parents helped out their children by paying for their groceries or helping with their mortgages. Under the Minister's proposal, these hard-hit families would be burdened with a bill for capital acquisitions tax.

What is being imposed by the Minister in section 81 is a very blunt instrument. I urge him to think again. My recommendation would reinstate the existing terms of section 82 of the 2003 Act and it also seeks to update the law by building in recognition of children of civil partnerships, which was not included in that legislation. I believe it is very worthy of consideration. If the Minister of State, Deputy Harris, and the Minister, Deputy Noonan, think this through, they will realise it is a blunt instrument which does not serve the stated objective.

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