Jack Chambers (Dublin West, Fianna Fail)
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258. To ask the Minister for Finance the changes, if any, to be made to capital acquisitions tax in respect of children; and if he will make a statement on the matter. [41804/16]

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 life-time tax-free threshold known as the "Group threshold" below which gift or inheritance tax does not arise. 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.

There are, in all, three separate Group thresholds based on the relationship of the beneficiary to the disponer. Each of these was increased in the most recent budget, Budget 2017.

Group A: tax free threshold €310,000 (formerly €280,000) 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.

Group B: tax free threshold €32,500 (formerly €30,150) applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer.

Group C: tax free threshold €16,250 (formerly €15,075) applies in all other cases.

In 2015 the Group A CAT threshold, applying to transfers from parents to their children, was €225,000. I raised it to €280,000 in Budget 2016 and further increased it to €310,000 in Budget 2017. This represents an increase of about 38% in two years. Options for future changes to CAT will be considered in the context of the upcoming budget processes.