Eoghan Murphy (Dublin Bay South, Fine Gael)
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60. To ask the Minister for Finance if he will consider amending the parental gift tax exemption in order that the limit is placed on the recipient rather than that the benefactor given that children of single parents can only receive half the tax free amount of those with two parents. [42374/20]

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 three separate Group thresholds based on the relationship of the beneficiary to the disponer.

Group Athreshold (currently €335,000) applies where the beneficiary is a child of the disponer. This includes adopted children, step children and some foster children.

Group B threshold (currently €32,500) applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer.

Group Cthreshold (currently €16,250) applies in all other cases.

A fundamental principle of the Capital Acquisitions Tax regime is that inheritance or gift tax is levied on the beneficiary and that the level of taxation is determined according to their relationship with the disponer.

It is not the case that children of single parents can only receive half the tax free amount of those with two parents. A beneficiary will have access to the Group A threshold of €335,000 for all gifts and inheritances received from disponers within that group. This applies regardless of whether the gift or inheritance comes from a single parent, or from multiple “Group A” disponers. The value of gifts and inheritances received from all disponers in Group A are aggregated together and the amount over the Group A tax-free threshold (currently €335,000) will be subject to CAT, currently at a rate of 33%.