Vol. 523 No. 5
196 Mr. N. Ahern asked the Minister for Finance if he will, in the context of the next budget, restore the relativity in capital acquisitions tax thresholds between siblings which were first introduced in 1976 at a level of £10,000 and which would now be at a level of £126,000 if index linked. [21607/00]
The capital acquisitions tax exempt threshold now applying on transfers between siblings is £30,000. This was increased from £25,720 in Budget 2000. As the Deputy will be aware, I also introduced other substantial changes to the CAT legislation in the budget. In addition to increasing the three tax-free thresholds for gifts and inheritances, I introduced a single CAT rate of 20% to replace the previous rates of 20%, 30% and 40%. I also introduced a dwellinghouse exemption whereby the transfer of a shared family home is exempt from CAT subject to certain conditions.
These measures will reduce the CAT liability of all beneficiaries including siblings. The significant package of measures contained in Budget 2000 constitutes the biggest single easement in the structure of CAT since its introduction in 1976. When considering the increase in the three exempt thresholds in Budget 2000, I decided against further increases because of Exchequer costs. However, as I indicated during the discussions of the Finance Bill, 2000, the issue of CAT will be kept under review.
