Paul Connaughton (Galway East, Fine Gael)
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292. To ask the Minister for Finance if he will consider changing the date that the exemption from inheritance tax applies, to the date of death of the benefactor, and not the date when the grant of probate is finalised; and if he will make a statement on the matter. [37521/15]

Michael Noonan (Limerick City, Fine Gael)
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When an individual receives an inheritance the rate of Capital Acquisitions Tax (CAT) due and the tax-free threshold to which the individual is entitled are those in place on the date of inheritance, which is defined as the date of the latest death that had to occur for the successor to become beneficially entitled to the property. I have received representations suggesting that instead of this, the rate and thresholds which apply should be those in place at the time of the grant of probate. I have no plans to make such a change. It is a general legislative principle that tax legislation should follow general law. According to the law of inheritance an inheritor comes to own an inherited asset on the date of inheritance, rather than on any other date. This is therefore the soundest and most appropriate date on which the rates and thresholds can apply.

The amount of time elapsing between inheritance and grant of probate can vary greatly, and can also be determined to a large extent by inheritors themselves. As such, were the rate of tax due and the tax-free threshold available to be defined by date of probate there would be considerable scope for individuals to delay probate with the hope that the CAT regime would become more favourable for them.

While I understand that there are inheritors for whom it would currently be advantageous for the tax-free threshold and rate of tax to apply according to the date of probate, as the threshold for inheritances from parents has been increased, there have been and could again be situations where the opposite is the case, for instance when the thresholds have been reduced or the rate increased.