Michael Healy-Rae (Kerry, Independent)
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335. To ask the Minister for Finance his views on matters in relation to inheritance tax (details supplied); and if he will make a statement on the matter. [1028/25]

Jack Chambers (Dublin West, Fianna Fail)
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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.

While the thresholds were reduced during the economic downturn, the Government has made changes to the CAT thresholds in recent years. In Budget 2025, the Group A threshold was increased from €335,000 to €400,000, Group B from €32,500 to €40,000 and Group C from €16,250 to €20,000.

It is worth noting that there is an exemption from CAT where dwelling houses are bequeathed to individuals who:

• have lived there for a specified period of time before the inheritance,
• will continue to live there for a specified period of time after the inheritance, and
• who have no beneficial interest in any other residential property at the date of the inheritance.

You should be aware that there would be a significant cost in making substantial changes to the CAT thresholds. The options available for setting CAT thresholds must be balanced against competing demands, and as part of the annual Budget and Finance Bill process.

Paul McAuliffe (Dublin North-West, Fianna Fail)
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336. To ask the Minister for Finance if he is considering reducing the VAT on musical instruments and artist materials; and if he will make a statement on the matter. [1148/25]

Jack Chambers (Dublin West, Fianna Fail)
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The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within the categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate of VAT.

Musical instruments and artist materials are not included in the categories of goods and services on which the EU Directive allows a lower rate of VAT to be applied, and as such they are liable to VAT at the standard rate. There is no discretion under the Directive for Ireland to apply a lower rate of VAT to such supplies.