Wednesday, 3 November 2021
Department of Finance
89. To ask the Minister for Finance if he plans to remove the condition that a person must be a dependent relative of the person making a gift of a house to another person as long as all the other conditions are met for the purposes of the gift being exempt from capital acquisitions tax; the reason the law provides at present that the receiver must be a dependent relative; and if he will make a statement on the matter. [53442/21]
The original policy objective of the dwelling house exemption relief was to alleviate the hardship of an inheritance tax liability for a person who inherits a house in which he or she had been living with the deceased and to ensure that the person did not have to sell the house to pay the tax liability. Over time, however, the relief had moved away from its original policy focus, and was being used regularly for the purpose of gifts.
Consequently, changes were agreed in Finance Act 2016 so that the dwelling house exemption is only available for inheritances, and not gifts. The exception to this is where a person gifts a dwelling house to a dependent relative. For this purpose, a dependent relative is a direct relative of the donor, or of the donor’s spouse or civil partner, who is permanently and totally incapacitated because of physical or mental infirmity from maintaining himself or herself or who is over the age of 65.
The intention in allowing such gifts under the dwelling house exemption is to facilitate independent living for infirm and elderly people.
I have no plans to remove the condition that, in the context of gifts qualifying for the dwelling house exemption, a person must be a dependent relative of the person making a gift of a house to another person.