Michael Noonan (Limerick City, Fine Gael)
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Capital Acquisitions Tax (CAT) is the overall title for both Gift and Inheritance Tax. The tax is charged on the amount gifted to, or inherited by, the beneficiary of the gift or inheritance.

For the purposes of CAT, the relationship between the person who provides the gift or inheritance (i.e. the disponer) and the person who receives the gift or inheritance (i.e. the beneficiary), determines the maximum life-time tax-free threshold known as the "Group threshold", below which gift or inheritance tax does not arise.

There are, in all, three separate Group thresholds based on the relationship of the beneficiary to the disponer.

The Group A tax free threshold of €225,000,applies where the beneficiary is a child (including adopted child, stepchild 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.

The Group B tax free threshold of €30,150, applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer.

The Group C tax free threshold €15,075,applies in all other cases.

Where a person receives gifts or inheritances in excess of their relevant tax free threshold, CAT at a rate of 33% applies on the excess over the tax free threshold. These thresholds have been reduced in recent years as part of the effort to restore the public finances as taxes on capital are less harmful from an economic perspective than taxes on employment. For the same reason the rate has gradually risen from 20% in 2008 to its current rate of 33%.

The property market continues to improve with positive developments which had been restricted to the Dublin now manifesting in other areas of the country, though not to the same extent in terms of price rises, and it is recognised that this has a bearing on taxation of the inheritance of property with respect to CAT thresholds.

Capital Acquisitions Tax and various elements thereof, e.g. thresholds and rates, will like all other taxes be kept under review, particularly in the context of preparations for Budget 2016 and the consequent Finance Bill.