Michael Ring (Mayo, Fine Gael)
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177. To ask the Minister for Finance if he will amend threshold groups (details supplied); and if he will make a statement on the matter. [27914/24]

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, after allowing for the application of the relevant Group threshold.

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.

Section 4 CATCA 2003 provides for CAT to be charged on gifts and section 9 CATCA 2003 provides for CAT to be charged on inheritances.

Section 50 CATCA 2003 provides that the amount of CAT payable is to be determined in accordance with the rules in Schedule 2 of CATCA 2003. Schedule 2 CATCA 2003 provides for the three Group thresholds”, below which a charge to CAT does not arise.

The Deputy should be aware that there would be a significant cost in making substantial changes to the CAT thresholds. Recent Revenue estimates put the full cost of increasing the CAT Group A threshold from its current €335,000 to €400,000, for example, at approximately €52 million. The estimated cost of increasing the Group B threshold from its current €32,500 to €50,000, €100,000 and €335,000 would be €53 million, €137 million and €248 million retrospectively. While the cost of increasing the Group C threshold from €16,250 to €19,000 is estimated to be €3 million.

The options available for setting CAT thresholds must be balanced against competing demands, and as part of the annual Budget and Finance Bill process.