Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 154: To ask the Tánaiste and Minister for Finance the maximum value of cash which can be transferred to a niece or nephew which is exempt under inheritance tax in group B; his plans to increase this threshold; and if he will make a statement on the matter. [4493/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Group B threshold for 2008 is €52,121. Any other gifts/inheritance that might have been received within this group by an individual since 5 December 1991 are also taken into account when applying the threshold for the purposes of calculating Capital Acquisitions Tax. If the total value of all inheritances and gifts received since this date is above the relevant threshold, then a 20% CAT will apply on the difference. As regards increasing the threshold, the Deputy should note that the thresholds are increased on an annual basis in accordance with the CSO Consumer Price Index and I have no current plans to change this.

Favourite niece/nephew relief is available to certain nephews and nieces who take a gift or an inheritance of a business or farm from the disponer. If the niece/nephew qualifies for the relief, they are treated as a child of the disponer for CAT purposes, and instead of a Group B threshold, they are entitled to a Group A threshold (currently €521,208) for the business or farm assets only. This means that if a gift or inheritance includes business/farm and non-business/farm assets the Group B threshold will apply to the non-business/farm assets and the Group A threshold will apply to the business/farm assets. In order to qualify for the relief, the applicant must be a child of a brother or sister of the disponer (in other words, a nephew/niece in law will not qualify) and he/she must have worked substantially on a full-time basis for the disponer for a minimum of five years ending on the date of the gift or inheritance.