Pearse Doherty (Donegal, Sinn Fein)
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250. To ask the Minister for Finance the grounds on which a CAT payment could be delayed or paid in instalments; and if he will make a statement on the matter. [19600/17]

Pearse Doherty (Donegal, Sinn Fein)
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251. To ask the Minister for Finance the timeframe in which CAT due is payable; and if he will make a statement on the matter. [19601/17]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 250 and 251 together.

I am advised by Revenue that there are two important dates that are relevant for the taxation of a gift or an inheritance via Capital Acquisitions Tax (CAT). These dates are used for different purposes and are mutually exclusive. Firstly, the date of a gift or, in the case of an inheritance, the date of the death of a disponer, is the date by reference to which the CAT Group Thresholds and tax rates are determined. Secondly, the ‘valuation date’, i.e. the date on which the market value of the assets/property comprising the gift or inheritance is established, is generally the date of the gift or, in the case of an inheritance, is generally the date on which probate or administration is granted. This market value is then compared to the relevant Group Threshold and the tax rate applied as appropriate on any excess of the market value over the threshold. This date also determines when any gift or inheritance tax must be paid and a tax return must be submitted to Revenue.

Where the valuation date for a gift or an inheritance is in the period 1 January to 31 August, a CAT return and payment of CAT due must be made by 31 October in that year. Where the valuation date for a gift or an inheritance is in the period 1 September and 31 December, a CAT return and payment of CAT due must be made by 31 October in the following year.

Where a CAT liability is attributable to a gift or an inheritance of ‘real’ property such as land and/or buildings, a beneficiary has a statutory entitlement to pay this liability by monthly instalments over a period of up to five years. Instalments are subject to the payment of interest at an annual rate of 8% on the amount of the outstanding tax. However, Revenue has the discretion to allow payment of CAT by instalments over a longer period of time in exceptional circumstances where the tax cannot be paid without excessive hardship. In cases of hardship, Revenue also has the discretion to allow payment to be postponed for such period and on such terms (including the waiver of interest) as it thinks fit.

Revenue may also exercise discretion in relation to any property or assets by allowing the payment of CAT over a longer instalment period than the statutory five-year period allowed for ‘real’ property. This discretion can be exercised only in exceptional circumstances where the taxpayer can show that payment of the CAT liability by the due date would present significant difficulty. Interest is chargeable on any such late payment. Revenue will consider each case on its merits, taking into account both the financial circumstances of the beneficiary and the nature of the inheritance involved.