Thomas Pringle (Donegal, Independent)
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185. To ask the Minister for Finance if he will consider adding persons in circumstances (details supplied) to inheritance group A; if not if he will create an exemption under an inheritance tax band, for family who play the role of carer to family members with no children or family of their own; and if he will make a statement on the matter. [28169/24]

Jack Chambers (Dublin West, Fianna Fail)
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For Capital Acquisitions Tax (CAT) purposes, the relationship between the person giving a gift or inheritance (i.e. the disponer) and the person who receives it (i.e. the beneficiary) determines the maximum amount, known as the “Group threshold”, below which CAT does not arise.

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 such as a grandchild of the disponer. The Group C threshold (currently €16,250) applies in all other cases.

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 tax-free threshold, CAT at a rate of 33% applies on the excess benefit.

Accordingly, where a person receives a gift or inheritance from their aunt or uncle, the Group B threshold of €32,500 will apply. CAT will be payable by the person at a rate of 33% to the extent that the benefit received, when aggregated with any prior gift or inheritance received since 5 December 1991, exceeds this threshold.

However, where an aunt or uncle leaves a dwelling house to their niece or nephew, the niece or nephew may be in a position to avail of the dwelling house exemption. To qualify for the exemption, the inherited property must have been the disponer’s principal private residence at the date of death. This requirement is relaxed in situations where the deceased person left the property before the date of death due to ill health; for example, to live in in a nursing home. The beneficiary must also have lived in the house for 3 years prior to the date of the inheritance and must continue to live in the house for 6 years after that date. In addition, the beneficiary must not have a beneficial interest in any other residential property. Detailed guidance on the dwelling house exemption has been published on the Revenue website at .

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