Pádraig O'Sullivan (Cork North-Central, Fianna Fail)
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44. To ask the Minister for Finance if he will consider the inheritance-tax liability of citizens without children and, in doing so, allow more favourable terms when their estate provides for nieces and nephews, brothers and sisters; and if he will make a statement on the matter. [15981/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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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.For clarity it is useful to note that the definition for children for CAT purposes includes any stepchildren, adopted children or certain foster children. All can avail of the Group A threshold in respect of gifts and inheritances received from that disponer.In addition, nieces or nephews of that disponer may qualify for favourite niece or favourite nephew relief in respect of gifts or inheritances of business assets. The relief allows a niece or nephew who qualifies for the relief to avail of the Group A threshold. Qualifying nieces or nephews are those who have worked substantially on a full-time basis for a period of five years prior to the gift or inheritance being given in carrying on, or assisting in the carrying on, the trade, business or profession, of the disponer. For the nephew or niece to be deemed to be working substantially on a full-time basis in the business he or she must work:> more than 24 hours per week at the place where the business, trade or profession is carried on; or more than 15 hours per week at the place where the business, trade or profession is carried on exclusively by the disponer, any spouse or civil partner of the disponer and the nephew or niece.Furthermore, it is worth noting that there is an exemption from CAT where dwelling houses are bequeathed by 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. The policy rationale behind the dwelling house exemption is to protect the family home by ensuring that a beneficiary who has been living with the disponer, and will continue to reside there after the inheritance, does not have to sell that family home to pay a CAT liability and thus will continue to have somewhere to live. It is not necessary for the beneficiary of an inheritance under the dwelling house exemption to be a child or relative of the disponer. My officials are reviewing Capital Acquisition Taxes as part of the annual Tax Strategy Group papers. These papers outline the tax policy considerations for the Government and the options available to it in forming this year’s Budget. The papers are published in advance of the Budget and are the best way to consider inheritance tax in an analytical and transparent way.

The deputy 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.

Cathal Crowe (Clare, Fianna Fail)
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45. To ask the Minister for Finance if he will provide an overview of the work underway in his Department to fulfil the Programme for Government pledge to reduce the VAT rate applicable to food and beverage hospitality; and if he will make a statement on the matter. [15777/25]

Michael Cahill (Kerry, Fianna Fail)
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59. To ask the Minister for Finance to support the hospitality sector and hairdressers by reintroducing the 9% VAT rate as a matter of priority; when the 9% VAT rate will be reintroduced; and if he will make a statement on the matter. [9148/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 45 and 59 together.

In recognition of the needs of SMEs in the hospitality sector, the Programme for Government does commit to bring forward measures to support SMEs, in particular in the retail and hospitality sectors. It acknowledges the increased cost pressures on these sectors and states that this will entail changes to VAT, PRSI and other measures.

As the Deputies will be aware, in making any decision in relation to VAT rates or other taxation measures, the Government must balance the costs of the measures in question against their impact and the overall budgetary framework.

The Programme for Government makes it clear that these measures will be implemented as part of the normal budget process. This will include consideration in the relevant Tax Strategy Group paper in advance of the budget. The timing of any VAT change as well as its scope will be considered as part of that process.