The Deputy will be aware that I introduced substantial changes to the capital acquisitions tax legislation in the recent budget. These included an increase of the three tax-free thresholds and a new single CAT rate of 20 per cent to replace the old rates of 20 per cent, 30 per cent and 40 per cent. This single rate will apply uniformly to both gifts and inheritances.
In addition, I introduced a family home relief. The purpose of this relief within the CAT regime is to ensure, in so far as is possible, that persons who inherit, or are gifted, the home in which they are living, and in which they may have lived for many years, do not face a substantial tax bill when they get the home. To qualify for the relief the recipient of the home must have lived in the home for the three years prior to the gift or inheritance. I do not propose to introduce any further changes which would depart from the broad thrust of the relief as I have described it here.
In the case outlined, where a house is being willed by an individual to his brother who has not lived in the house prior to the transfer, the tax-free threshold of £30,000 will apply for CAT purposes. However, possible hardship is taken into account by the Revenue Commissioners when determining the terms of payment of capital acquisitions tax. Where the threshold is exceeded, for example, payment by instalment may be arranged, and tax may be postponed in certain cases.
