Michael Lowry (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

371.To ask the Minister for Finance to address concerns regarding inheritance tax, particularly its impact on young people; if he will address the issue of costs incurred by individuals inheriting property and assets from a parent; if he is aware that currently the average cost for tax advisors on such matters is approximately €1,500 alone, before any professional solicitors’ fees are paid; his plans in Budget 2025 to help individuals who are impacted by these costs which occur before any capital acquisitions tax is paid; and if he will make a statement on the matter.[35559/24]

Jack Chambers (Dublin West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Capital Acquisitions Tax (CAT) is payable on the “taxable value” of a gift or inheritance. The taxable value of a gift or inheritance is determined in accordance with section 28 of the Capital Acquisitions Tax Consolidation Act 2003. Section 28 provides that the taxable value of a gift or inheritance is calculated by deducting “any liabilities, costs and expenses that are properly payable out of the taxable gift or taxable inheritance” from the market value of the property comprised in that gift or inheritance. This amount, referred to as the “incumbrance free value”, is then reduced further by any consideration paid by the person receiving the gift or inheritance (i.e., the beneficiary).

I am advised by Revenue that where a person receives a property by way of a gift or inheritance and the person engages the services of a professional services firm such as a law firm or a firm of tax advisors in relation to the receipt of that gift or inheritance, Revenue will generally accept that fees incurred on the professional services can be deducted to determine the taxable value of that gift or inheritance to the extent that such fees are necessarily and reasonably incurred in connection with the receipt of the gift or inheritance.

If a person has a query in relation to the taxation of a specific gift or inheritance they have received, they may wish to present full details of the query to Revenue via MyEnquiries, which is accessible by logging into myAccount on the Revenue website. In addition, contact details for Revenue’s National Capital Acquisitions Tax Unit are available on the Revenue website at www.revenue.ie/en/contact-us/customer-service-contact/national-capital-acquisitions-tax-cat-unit.aspx.

Michael Lowry (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

372.To ask the Minister for Finance to address the concerns regarding inheritance tax, will he consider reviewing the thresholds in Budget 2025 and provide increased tax-free thresholds and clearer guidance to alleviate the tax burden on young people inheriting family homes and assets, particularly its impact on family homes across Ireland (details supplied); and if he will make a statement on the matter.[35564/24]

Jack Chambers (Dublin West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Capital Acquisitions Tax (CAT) is a tax which applies to both gifts and inheritances. For 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 is currently set at €335,000 and applies where the beneficiary is a child, including adopted children, stepchildren and certain foster children, of the disponer.

While the thresholds were reduced during the economic downturn, the Government has made changes to the CAT thresholds in recent years. The thresholds have been increased to the extent allowable by the available resources. In Budget 2019, the Group A threshold which applies primarily to gifts and inheritances from parents to their children was increased from €310,000 to €320,000 and again to €335,000 in Budget 2020.

You should be aware that there would be a significant cost in making further substantial changes to the CAT thresholds.

As with all areas of tax policy, CAT is reviewed as part of the annual budgetary and Finance Bill cycle.