Brendan Griffin (Kerry, Fine Gael)
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96. To ask the Minister for Finance his views on a matter (details supplied) regarding inheritance tax; and if he will make a statement on the matter. [10528/17]

Michael Noonan (Limerick City, Fine Gael)
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As you are aware, 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. 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. I raised each of these in Budget 2017.

Group A: tax free threshold now €310,000 (increased from €280,000 in Budget 2017) 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 now €32,500 (increased from €30,150 in Budget 2017) 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 now €16,250 (increased from €15,075 in Budget 2017) applies in all other cases.

In 2015 the Group A CAT threshold was €225,000. I subsequently raised it to €280,000 in Budget 2016 and as already noted, it is now €310,000. This represents an increase of about 38% in two years. I did this in recognition of the improving state of the national finances and of the concerns expressed to me by people making and receiving gifts and inheritance, particularly in the context of rising property prices.

I have previously indicated that I see the changes to the tax-free thresholds as part of a process, and you will be aware that the issue of CAT thresholds has been identified in "A Programme for a Partnership Government", where measures suggested include raising the Group A tax-free threshold to €500,000. However no timeline has yet been determined for implementing this proposal.