Dáil Éireann debate -
Tuesday, 10 Apr 2001

Vol. 534 No. 3

Written Answers. - Probate Tax.

Róisín Shortall

Question:

143 Ms Shortall asked the Minister for Finance if his attention has been drawn to the continued contribution of probate tax to homelessness for families who were willed property they previously shared with the testator, typically in the case of the death of a parent, prior to December 2000; and if he will arrange for a review of legislation and reform thereafter to prevent this unintentional effect of the tax. [10816/01]

Minister for Finance (Mr. McCreevy)

As the Deputy is aware, in the budget 2001 I abolished probate tax in respect of deaths occurring on or after budget day, 6 December 2000. In the case of probate tax arising on estates where the death occurred before 6 December 2000, the tax is charged at a rate of 2% on the net value of non-exempt assets left by a deceased whether the assets passed under a will or intestacy. Estates with a taxable value of £40,000 or less are exempt from the tax. A total exemption from probate tax is available where property passes to a spouse and where jointly owned property passes automatically from one joint owner to another joint owner.

As regards a house being left to a family member, there is an exemption in such cases where the beneficiary is a dependent child or dependent relative of the deceased. The house is exempt from probate tax provided the dependent child or relative had been residing in the dwelling house at the death of the deceased and had an income not exceeding the specified amount applicable in the tax year prior to the date of death – for the tax year 1999-2000 the specified amount is £5,152. To qualify as a dependent child, the child must have been under the age of 18 years, or if over 18 years, in full time education. To qualify as a dependent relative, the person concerned must have been a relative of the deceased or of the wife or husband of the deceased, who was incapacitated by old age or infirmity from maintaining himself or herself or the widowed father or mother, whether or not he or she was so incapacitated, of the deceased or of the wife or husband of the deceased. In addition, there is an existing provision in the legislation for deferral of the tax by the Revenue Commissioners in cases of hardship or where the estate is illiquid. This provision for hardship cases has applied since the introduction of probate tax.