Written Answers. - Inheritance Tax.
Noel Ahern
Question:
86
Mr. N. Ahern
asked the
Minister for Finance
when inheritance tax was first introduced; the main threshold bands in that year; the average weekly industrial wage; the equivalent figures for 1999; if the threshold moved in line with the consumer price and residential property indices; and if he will make a statement on the matter.
[23975/99]
When inheritance tax was introduced by the Capital Acquisitions Tax Act 1976, the exempt thresholds in existence at that time were as follows: Class I: £150,000 – where the recipient is a spouse, child, or minor child of a deceased child (i.e. certain grandchildren) of the disponer. Class II: £15,000 – where the recipient is a lineal ancestor or lineal descendent (other than those covered by Class I) of the disponer. Class III: £10,000 – where the recipient is a brother or a sister, or a child of a brother or of a sister, of the disponer. Class IV: £5,000 – where the recipient does not fall within Classes I, II, or III (i.e. non-lineal relations and strangers).
In 1999, there are three exempt class thresholds as follows: Class I: £192,900 – where the recipient is a child, or minor child of a deceased child (i.e. certain grandchildren) of the disponer. This threshold also applies to a parent where he or she takes an absolute inheritance on the death of a child. Stepchildren and legally adopted children are also entitled to the £192,900 threshold. Since 1985, inheritances taken by spouses are exempt from capital acquisitions tax; Class II: £25,720 – where the recipient is a brother, sister, nephew, niece, lineal ancestor or lineal descendent of the disponer, other than those covered by Class I; Class III: £12,860 – where the recipient does not fall within Classes I or II, i.e. non-lineal relations and strangers.
Capital acquisitions tax is charged on the value of the inheritance in excess of the relevant exempt threshold. Since 1990, these thresholds have been indexed to the consumer price index.
There is no data available from the Central Statistics Office for the average industrial wage in 1976. However, data is available for the average manufacturing weekly wage for that year, which was £52.50. In 1999, the average industrial weekly wage is £305.57, based on figures to date.
I have indicated to the Dáil earlier this year, during the Finance Bill debate, and in response to parliamentary questions in recent months, that I would examine the capital acquisitions tax code, including inheritance tax, in detail for the forthcoming budget. This examination is currently taking place.
