Alan Shatter (Dublin South, Fine Gael)
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Question 99: To ask the Tánaiste and Minister for Finance the reforms he proposes to introduce in relation to inheritance tax and in particular with regard to property inherited from family members. [17234/07]

Alan Shatter (Dublin South, Fine Gael)
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Question 103: To ask the Tánaiste and Minister for Finance if he will abolish inheritance tax on property inherited by minor and adult children from their parents; and if he will make a statement on the matter. [17235/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 99 and 103 together.

Inheritance tax is part of the capital acquisitions tax (CAT) code, which includes both gift tax and inheritance tax. It was first introduced in 1976 and replaced estate duty taxation. The Finance Act 2000 introduced a package of measures specifically designed to reduce the impact of CAT where assets are transferred. These measures included increased thresholds, the introduction of a single low rate of tax at 20% and the exemption of the family home in the circumstances described below. These measures constituted the most radical reduction in the incidence of gift/inheritance tax since its introduction in 1976.

The CAT code includes group thresholds, below which no CAT is liable. The relationship between the person who provides the gift/inheritance (i.e. the disponer) and the person receiving the gift/inheritance (i.e. the beneficiary) determines the tax-free threshold applicable to the inheritance (the group threshold). There are three categories of relationship with regard to relief from CAT and these are increased on an annual basis in accordance with the CSO Consumer Price Index. The indexed group thresholds applying to a gift or inheritance for 2007 are set out in the table.

Any other gifts/inheritance that might have been received within the same group by an individual since 5 December 1991 are also taken into account when applying the thresholds for the purposes of calculating CAT. If the total value of all inheritances and gifts, within the group, which were received since this date is above the relevant threshold, then a 20% CAT will apply on the difference.

In addition to the group thresholds, the Finance Act 2000 introduced a very valuable exemption from CAT for certain dwelling houses. The purpose of the exemption is to benefit individuals who have been living in a house for a period prior to the taking of the benefit by way of inheritance. The conditions attaching to this exemption are not very restrictive and the main condition is that the beneficiary has to occupy the dwelling house as his or her only or main residence for a period of three years prior to the gift or inheritance and continue to reside in it for a period of six years after the date of the gift or inheritance. It is a full exemption without the application of any ceiling or requirement that the beneficiary has to be related to the disponer.

I have no plans to introduce any changes at this point.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 100: To ask the Tánaiste and Minister for Finance if it is intended that the commission on taxation proposed in the programme for Government will review user fees and service charges for essential public services specifically to examine their impact on low income families with a view to reducing the proportion of funding of public services which comes from charges to members of the public who utilise such services. [17250/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Programme for Government contains certain commitments in the area of taxation policy including a commitment to the establishment of a Commission on Taxation which will have a wide remit to consider the structure of the taxation system. The Commission will be specifically charged with considering and making recommendations on the following:

Examine the balance achieved between taxes collected on income, capital and spending and report on it

Review all tax expenditures with a view to recommending the discontinuation of those that are unjustifiable on cost/benefit grounds

Consider options for the future financing of local government

In the context of maintaining a strong economy, investigate fiscal measures to protect and enhance the environment including the introduction of a carbon tax

I will be bringing proposals to Government in the near future on matters relating to the establishment of the proposed Commission including its membership and terms of reference. Pending consideration by the Government of these proposals, I am not in a position to elaborate further on matters pertaining to the Commission or its work programme.