Joanna Tuffy (Dublin Mid West, Labour)
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78. To ask the Minister for Finance if he will provide an update on the percentage of the value of inherited property that capital acquisitions tax was paid on (details supplied); and if he will make a statement on the matter. [24063/15]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that €356m was paid in respect of capital acquisitions tax for the year 2014. A breakdown of this total by gift tax, inheritance tax, probate tax and discretionary trust tax is available on the Revenue Commissioners' statistics website at . The most recent year for which this information is available is 2014 and updates will be published in due course. However, they are not in a position to provide the figure requested by Deputy Tuffy.  The source of their information on the value of inherited property are the returns that persons, who are liable for the payment of capital acquisitions tax (CAT), are required to make when property is transferred under a deceased person's will or intestacy. These returns do not contain information in respect of all such properties. There are a number of reasons for this.

In common with most other taxes, CAT operates on a self-assessment basis. Several of the tax exemptions that are available are taken on a self-assessment basis and the person who inherits the property is not required to submit a return to Revenue.  For example, information in respect of property transferring between spouses and civil partners, from deceased children to parents and to charitable bodies does not have to be submitted to Revenue as tax exemption is taken on a self-assessment basis.

The relationship between the deceased person and the person who inherits a property determines the maximum life-time aggregate tax-free threshold below which CAT is not charged. There are, in all, three separate relationship thresholds (set out below). The value of each of a person's inheritances since 5 December 1991 is aggregated and CAT is charged, where the aggregate value exceeds the relevant threshold, on any amount that exceeds the threshold. However, it is only where the value of property inherited by a beneficiary exceeds 80% of the relevant threshold (or the actual threshold) that a return has to be submitted to Revenue.

Group A: tax free threshold €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 deceased person. This threshold also applies to parents where they inherit an absolute interest in a property from a child.

Group B: tax free threshold €30,150 applies where the beneficiary is a brother, sister, nephew, niece, lineal ancestor (for example, a grandparent) or lineal descendant of the deceased person.

Group C: tax free threshold €15,075 applies in all other cases, for example, from uncle to niece, between in-laws and persons with no relationship to each other.

Apart from the absence of the information requested by the Deputy, other considerations are also relevant. CAT is not an 'estate' tax in the sense that it does not apply to the value of a deceased person's entire estate. Rather, it is a tax on the value of property inherited by an individual beneficiary. This means that a high value property, if inherited jointly by several beneficiaries, may be below the individual tax-exempt thresholds for those beneficiaries and, therefore, not liable for the payment of CAT. 

Significant relief from the payment of CAT is available where farmland and other business property is inherited. Where certain conditions are met, for example, in relation to the use to which the farm/property is put following the inheritance, the market value of the farm/property may be reduced by 90% before CAT is charged.