Peadar Tóibín (Meath West, Aontú)
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578. To ask the Minister for Finance the rationale for the hierarchy in the thresholds in relation to the tax-free threshold for capital acquisition tax and the treatment of childless individuals under its terms; how it is equitable that childless individuals are treated in such contrasting terms to those who have children and seeking to pass on assets to them; if he will publish any documentation that screened the policy for discrimination; and if he will make a statement on the matter. [19283/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Capital Acquisitions Tax (CAT) is a beneficiary-based tax on gifts and inheritances that is payable on the value of the property received. 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.

There are three Group thresholds:

• the Group A threshold (currently €400,000) applies where the beneficiary is a child of the person giving the gift or inheritance
• the Group B threshold (currently €40,000) applies where the beneficiary is a brother, sister, nephew, niece, lineal ancestor or lineal descendant of the person giving the gift or inheritance
• the Group C threshold (currently €20,000) applies in all other cases.

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.

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.

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