Jack Wall (Kildare South, Labour)
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Question 206: To ask the Minister for Finance the liability for a sibling who inherits a family home; if there are circumstances in which such a tax would not apply; and if he will make a statement on the matter. [3967/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that for the purposes of Capital Acquisitions Tax (Gift and Inheritance Tax), the relationship between the person who provided the gift or inheritance (i.e., the disponer) and the person who received the gift or inheritance (i.e., the beneficiary), determines the maximum tax-free threshold – known as the "Group threshold" – below which gift or inheritance tax does not arise. There are, in all, three separate Group tax-free thresholds based on the relationship of the beneficiary to the disponer. Group A: €414,799 – applies where the beneficiary is a child (including adopted child, step-child and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child. Group B: €41,418 – applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer. Group C: €20,740 – applies in all other cases.

When calculating whether a beneficiary has received benefits in excess of his or her Group tax-free threshold, any other gifts and inheritances received by that beneficiary since 5 December 1991 from within the same Group are also taken into account. A sibling who takes an inheritance from their brother or sister falls into the Group B threshold above.

Apart from the tax-free Group thresholds available to a beneficiary, the Capital Acquisitions Tax code also exempts a gift or inheritance of a dwelling-house completely from gift or inheritance tax in certain circumstances. The main conditions attaching to the exemption are that the beneficiary of the dwelling -house must have resided in the dwelling-house for a minimum of three years prior to the gift or inheritance and must not have an interest in any other dwelling-house. In addition, the beneficiary must continue to occupy that dwelling-house as his or her only or main residence for a period of six years from the date of the gift or inheritance.

The exemption ensures that what may be the family home for many people will not be the subject of gift or inheritance tax when it is transferred. The dwelling-house exemption is available to any beneficiary who meets the conditions for the exemption irrespective of whether or not they are related to the disponer of the gift or inheritance and irrespective of the value of the dwelling-house being transferred.