Dáil Éireann debate -
Thursday, 25 Nov 1999

Vol. 511 No. 5

Written Answers. - Inter-Country Adoptions.

Marian McGennis

Question:

67 Ms M. McGennis asked the Minister for Finance if he is considering, in the context of the Finance Bill, the capital acquisition tax treatment of children whose adoptions in other states are currently unrecognised here; the communication, if any, he has had on this matter from the Department of Health and Children during 1999; and if he will make a statement on the matter. [24803/99]

Minister for Finance (Mr. McCreevy)

Where a child receives an inheritance or gift from a parent and has received no previous gifts or inheritances from any source since 2 December 1988, a tax free threshold of £192,900 applies for capital acquisitions tax purposes.

Children adopted under the law of a foreign state, where the adoption is recognised in Ireland, have the same rights as any child adopted in the state and can avail of this threshold of £192,900.

I understand from the Department of Health and Children that there are a number of children in Ireland who have been adopted in foreign jurisdictions by what is known as simple adoption. These adoptions are different in nature and legal effect to full adoption which is the type of adoption arrangement in this country. The Irish statutory system for the recognition of foreign adoptions does not provide for the recognition of such adoptions.

However, I understand that the Department of Health and Children is preparing legislation to ratify the Hague Convention on inter-country adoption. The question of simple adoptions is being considered in this context as article 27 of the convention makes provision for a mechanism to convert simple adoptions into full adoptions in the receiving country.

On the specific issue of capital acquisitions tax, I undertook in the Dáil, earlier in the year in the course of the Finance Bill, to review the capital acquisitions tax code in detail prior to the forthcoming budget. I am aware of the tax burden facing certain individuals, particularly on the inheritance of the family home where they had been residing. This review is currently taking place.