Cormac Devlin (Dún Laoghaire, Fianna Fail)
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35. To ask the Minister for Finance the changes he plans to capital acquisitions tax; and if he will make a statement on the matter. [15819/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Capital Acquisitions Tax (CAT) is a beneficiary-orientated tax that is payable by the recipient of a gift or inheritance as opposed to the person providing that gift or inheritance.

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 (currently €400,000) 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 €40,000) 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 €20,000) 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.

Gifts and inheritances between spouses and civil partners are exempt from CAT. There are also a number of exemptions and reliefs from CAT that may apply depending on the circumstances of the case, many of which do not require that any specific family relationship applies. One such exemption is the CAT dwelling house exemption. Where a person takes an inheritance of a dwelling house, that person may be able 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 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 www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-part24.pdf.

There is also provision in CAT legislation for a niece or nephew of the disponer to avail of the Group A threshold where the gift or inheritance consists of business assets and certain conditions are met. The niece or nephew must 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.

Further information on this relief has been published on the Revenue website at .

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 any further substantial changes to CAT. Finally, it is important to be aware that the options available for providing increases to CAT thresholds must be considered in the context of available resources and must also be balanced against competing demands.

Gerald Nash (Louth, Labour)
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36. To ask the Minister for Finance if he plans to review CAT inheritance tax thresholds and arrangements for couples who have no children; and if he will make a statement on the matter. [16238/25]

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. 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. 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. There is also provision in CAT legislation for a niece or nephew of the disponer to avail of the Group A threshold where the gift or inheritance consists of business assets and certain conditions are met. The niece or nephew must 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.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. These 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.