Written answers

Wednesday, 24 March 2010

9:00 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

Question 111: To ask the Minister for Finance if a person received a gift or inheritance under the then capital acquisitions tax threshold in a given category is liable for capital acquisitions tax; and if the threshold is subsequently adjusted below the value of the gift or inheritance due to consumer price index indexation. [13356/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

Capital Acquisitions Taxation (CAT) applies to gifts and inheritances. 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 tax-free threshold below which CAT does not apply on the gifts or inheritances. There are three tax-free thresholds based on the relationship of the beneficiary to the disponer and these tax-free thresholds are indexed annually by reference to the Consumer Price Index (CPI). The tax free thresholds for 2010 are: Group A (gifts or inheritances from parents to their children), €414,799; Group B (gifts/inheritances to grandchildren, siblings, nephews, nieces or to parents), €41,481; and Group C (all other persons), €27,127.

In the case of a gift, the tax-free threshold that applies is the specific tax-free threshold for the year in which the gift is received. In the case of an inheritance, the tax-free threshold that applies is the specific tax-free threshold for the year in which the disponer died (subject to a number of exceptions in the areas of trusts and settlements).

If the value of the gift or inheritance is below the specific relevant tax-free threshold for the year in question when prior benefits are also taken into account, then no tax is payable. If the tax-free thresholds are subsequently adjusted downwards in the following year due to a fall in the CPI and below the value of the gift or inheritance, this has no impact on the tax position of the beneficiary because the tax-free thresholds that apply to the beneficiary are, as stated, the specific tax-free thresholds for the year in which the gift is received or in which the disponer died and these tax-free thresholds are fixed at those points in time.

Comments

No comments

Log in or join to post a public comment.