Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

For the purpose of gift and inheritance tax or, as it is known, capital acquisitions tax, CAT, the relationship between the person who provided the gift or inheritance and the person who received the gift or inheritance determines the lifetime tax-free threshold, which is known as the group threshold. There are three such group thresholds, called the A, B and C thresholds, and this section 53 provides for increases in each of them. The programme for Government provides for an increase in the category A threshold to €500,000. This change represents a step in the direction towards fulfilling that commitment.

The Minister, Deputy Noonan, has provided for these changes in recognition of the ongoing increases in residential property values and the ensuing impact on beneficiaries who receive properties as part of a gift or inheritance. I would emphasise that these property price increases are happening across the country, not just in Dublin. As a result of these increases, beneficiaries are increasingly faced with considerable CAT liabilities on inheriting such properties. Considerable concern has been expressed to the Department in this regard. The Minister, Deputy Noonan, also took into account changing circumstances where inheritances can often be from those in the category B and C thresholds. Those thresholds have also been adjusted.

Many individuals, as well as Deputies and Senators on all sides, have contacted the Department regarding the considerable shock that people experience at being faced by such liabilities on inheriting property, be it from parents, close family members or others. The increases announced in the budget, and now being legislated for in this Bill, represent the maximum increase possible at this time in light of budgetary resources available. Further changes will be considered for future budgets if resources are available.

The House will also notice that the Minister has asked it to agree changes to the availability of the dwelling house exemption, for the most part restricting its use significantly. While I am happy that there are general reliefs available, I am also prepared to change legislation where there are unintended uses of such legislation.

The standard rate of CAT in respect of gifts and inheritances taken on or after 6 December 2012 remains at 33%. There are no plans to change that rate.