Bernard Durkan (Kildare North, Fine Gael)
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Question 311: To ask the Minister for Finance if inheritance or other tax is due in the transfer from father to daughter of a site to build a home for herself on her father's lands; and if he will make a statement on the matter. [5056/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The transfer of land can incur liability to tax under three tax heads; namely capital acquisitions tax (CAT) (which includes gift and inheritance tax); capital gains tax (CGT) and stamp duty. However, there are a number of reliefs and allowances in place in respect of each of these taxes to reduce the burden of taxation with regard to the transfer of a site from a parent to a child for the purposes of building a home.

The CAT code contains "Group threshold" exemptions, based on relationships, which provide relief from CAT on the disposal of assets between individuals. The Group threshold applying to a gift or inheritance received by a child from her parents for 2007 is €496,824. Any other gifts/inheritances that might have been received by the child from her parents since 5 December 1991 will also be taken into account when applying the threshold for the purposes of calculating the gift/inheritance tax. In this respect, if the value of the site now being transferred plus the value of any other gifts/inheritances received by the daughter from her parents since 5 December 1991 is, in total, below €496,824, no CAT will arise on the transfer.

Where land is transferred upon death, no charge to CGT or stamp duty arises. Life transfers may be liable to CGT and stamp duty in the normal manner. However, section 603A of the Taxes Consolidation Act 1997 and section 83A of the Stamp Duties Consolidation Act 1999 provide an exemption from CGT and stamp duty, respectively, in the case of a transfer of a site from a parent to a child, in certain circumstances, for the purposes of building a residence. The conditions are that (a) the site may not be greater in value than €254,000, and (b) the child must construct a dwelling house on the site and occupy it as her only or main residence for at least 3 years. In addition, the Finance Bill 2007 contains provisions to limit the size of the site concerned in the relief to 1 acre. A transfer by the child to her spouse will not constitute a transfer which withdraws the relief.