Written answers

Tuesday, 16 June 2015

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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266. To ask the Minister for Finance if he will consider introducing a tax credit and-or refund system for persons who require gluten free bread for medical purposes, and who do not have a taxable income, in view of the fact that persons who have a taxable income can apply for a tax rebate in respect of their expenditure on these items; and if he will make a statement on the matter. [23718/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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Section 469 of the Taxes Consolidation Act 1997 provides for relief in respect of qualifying expenses incurred in the provision of health care in a tax year against the tax paid by an individual for that year.  Health care is defined as the prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability, and includes care received by a woman in respect of a pregnancy. 

A person may claim tax relief at the standard rate on the cost of gluten-free foods which have been manufactured specifically for coeliacs and where the products are used in the treatment or alleviation of that condition on the advice of a medical practitioner.  Evidence of such advice should be retained.

There is no tax rebate available for those individuals that have no liability to income tax in the relevant tax year.  In addition, gluten-free bread qualifies for the zero percent rate of VAT, so no VAT is charged on these items.

In cases of exceptional need dietary supports may be available via the Social Welfare system, and this is a matter for the Minister for Social Protection.

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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267. To ask the Minister for Finance in view of the increase in property values, if he will consider amendments to the capital acquisitions tax regime in order to relieve the burden on persons who receive or inherit property; if he will introduce specific reliefs to cater for physically or mentally disabled persons who inherit a property; and if he will make a statement on the matter. [23721/15]

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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268. To ask the Minister for Finance his plans to increase the thresholds for capital acquisitions tax and to reduce the rate of tax; and if he will make a statement on the matter. [23740/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 267 and 268 together.

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 thresholdknown 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. In recent years these thresholds were reduced and the rate has been increased in order to maintain the yield from capital taxes in the face of falling asset prices and as part of our fiscal consolidation efforts. In addition, taxes on certain capital are less harmful from an economic perspective than taxes on employment.

I am aware that property values have increased, with developments that had been restricted to the Dublin area now manifesting in other areas of the country, though not to the same extent in terms of price rises. I recognise that this has a bearing on taxation of the inheritance and gifting of property with respect to CAT thresholds. In this light, I will be keeping Capital Acquisitions Tax thresholds, rates and other aspects of the tax under review, particularly in the context of preparations for Budget 2016 and the consequent Finance Bill.

In regard to Deputy O'Dea's question about people with disabilities who receive properties through gift or inheritance, the position is that if such an individual is living in the property they receive then they may be able to qualify for an exemption from CAT, provided certain conditions are met. I do not currently have further plans in this area, but I would be glad to examine without prejudice any specific proposals for change that the Deputy may wish to make.

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