Michael Ring (Mayo, Fine Gael)
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175. To ask the Minister for Finance if a relief can be extended (details supplied); and if he will make a statement on the matter. [27912/24]

Jack Chambers (Dublin West, Fianna Fail)
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Where a person receives a gift or inheritance of property, they may have to pay Capital Acquisitions Tax (CAT) on the value of the gift or inheritance received.

For CAT purposes, the relationship between the disponer (the person who provides the gift or inheritance) and the beneficiary determines the maximum amount, known as the Group threshold, below which CAT does not arise. Any prior gift or inheritance received by a beneficiary since 5 December 1991 from within the same Group threshold is aggregated for the purposes of determining whether any tax is payable on a benefit. Where a person receives gifts or inheritances that are in excess of the relevant Group threshold, CAT at a rate of 33% applies on the excess amount. There are three Group thresholds:

• the Group A threshold (currently €335,000) applies, inter alia, where the beneficiary is a child (including adopted child, stepchild and certain foster children) of the disponer;
• the Group B threshold (currently €32,500) applies where the beneficiary is a brother, sister, nephew, niece or lineal ancestor or lineal descendant of the disponer;
• the Group C threshold (currently €16,250) applies in all other cases.

Firstly, a gift or an inheritance received from a spouse or civil partner is always exempt from CAT.

Secondly, section 86 CATCA 2003 provides for an exemption for the inheritance of a dwelling house. This “dwelling house exemption” is not contingent on the nature of the relationship between the disponer and the beneficiary. To qualify for the exemption, the inherited dwelling house must have been the deceased person’s only or main residence at the date of his or her death. This requirement is relaxed in situations where the deceased person had to leave the house before the date of death because of ill health; for example, to live in a nursing home. In addition, the beneficiary of the inheritance must not have a beneficial interest in any other dwelling house at the date of the inheritance and at the valuation date. Finally, the beneficiary must have lived in the house for 3 years prior to the date of the inheritance and must continue to live in the dwelling house for 6 years after the date of the inheritance.

A gift of a dwelling house may come within the scope of this exemption if it is made to a dependent relative. A “dependent relative” is defined as a relative who is permanently and totally incapacitated due to mental or physical infirmity from maintaining himself or herself or who is aged 65 years or over at the date of the gift.

Detailed guidance on the dwelling house exemption is available on the Revenue website at .

Finally, a gift or inheritance taken by a qualified cohabitant in accordance with a Court Order made under Part 15 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 is exempt from CAT. Part 15 of that Act provides for a redress scheme whereby court orders can be obtained in certain circumstances in relation to the transfer of property. A “qualified cohabitant” is a person who has been in a committed and loving relationship with another person for a minimum period of 5 years (or 2 years where they are parents of one or more dependent children), whose relationship has ended due to death or separation and neither of whom was married to and living with another person in 4 of the 5 years immediately prior to the end of the relationship.

The options available for making changes to CAT exemptions must be balanced against competing demands, and as part of the annual Budget and Finance Bill process.