Seán Haughey (Dublin Bay North, Fianna Fail)
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146. To ask the Minister for Finance if he will consider introducing a long paying tax credit for PAYE taxpayers who have been consistently paying tax for over 30 years or more as a gesture of gratitude for their contribution to the State; if such tax payers are recognised in the tax code at present; and if he will make a statement on the matter. [43214/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am satisfied that, in the context of limited resources, the tax code already recognises those who have contributed to the State for a long period through measures that reduce the amount of tax that such persons pay in retirement.

For example, a person aged 65 and over is fully exempt from income tax where his or her total income from all sources is less than the relevant exemption limit of €36,000 in the case of a married couple or civil partners and €18,000 for a single individual.  Where a couple have dependent children, the exemption limit is increased by €575 per child for the first 2 children and €830 for each child thereafter. Where an individual exceeds the exemption limit, he or she is liable to tax based on the normal system of tax rates, rate bands and tax credits, subject to the application of marginal relief where relevant.

Other supports for the over 65s may apply depending on personal circumstances, including the Age Tax Credit which is available to all individuals aged 65 or over who do not qualify for an exemption from income tax. This credit is currently set at €245 for single individuals or €490 for a married couple or civil partners.

It should also be noted that those over 66 are exempt from Employee PRSI, and those over 70 with a total annual income of less than €60,000 benefit from a reduced rate of Universal Social Charge.  And other income tax credits may also be available depending on the personal circumstances of the individual, such as the personal tax credit, those for widows/widowers, for blind individuals, for those caring for incapacitated children or dependant relatives, and for health expenses incurred by the taxpayer.  These apply in addition to the various expenditure measures that give support to those aged 66 and over, including the State Pension and the Free Travel Scheme.

Seán Haughey (Dublin Bay North, Fianna Fail)
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147. To ask the Minister for Finance if he will increase the threshold for inheritance tax in respect of a sibling leaving a house to another sibling; the factors to be taken into account when determining this threshold; when it was last increased; and if he will make a statement on the matter. [43215/19]

Paschal Donohoe (Dublin Central, 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. 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.

Group Athreshold applies where the beneficiary is a child of the disponer. This includes adopted children, step children and some foster children.

Group B threshold applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer.

Group Cthreshold applies in all other cases.

In Budget 2020, I increased the Group A threshold in which applies primarily to gifts and inheritances from parents to their children from €320,000 to €335,000.

The Group B threshold was last changed in Budget 2017, when it was increased by €2,350 to its current value of €32,500 and the Category C threshold was also increased by €1,175 to €16,250.

The options available for providing increases to CAT thresholds is normally considered in the context of available resources, must be balanced against competing demands and take into account the need to maintain the yield from CAT. In addition, all Governments have favoured changes to the Category A threshold and there has always been a significant difference between the Category A and B and C thresholds.

The Deputy will appreciate that there would be a significant cost in making substantial changes to all three thresholds. For example, the estimated cost of increasing the CAT A threshold alone from its current €335,000 to €500,000 is €74.3 million.

Increasing the B threshold by €4,500 would cost in the order of €12.7m and indeed increasing the Group B and C thresholds to bring them into line with the Group A threshold is estimated at approximately €251.9 million.

In relation to the inheritance of a property from a sibling, there is also an exemption from CAT where dwelling houses are bequeathed by individuals who live there to successors who:

- have lived there for a specified period of time before the inheritance,

- will continue to live there for a specified period of time after the inheritance, and

- who have no beneficial interest in any other residential property at the date of the inheritance.

This exemption is not dependent on the relationship between the beneficiary and the disponer.