Dáil Éireann Debate, Thursday - 25 November 2004
117 Mr. Timmins asked the Minister for Finance the position of the case of a person (details supplied) in County Wicklow; if, in view of the circumstances, this case can be treated as a special case and exempted from capital acquisition tax; and if he will make a statement on the matter. [30769/04]
View answerCapital acquisitions tax is payable by the recipient or beneficiary. The relationship between the person who provides the gift or inheritance, the disponer, and the person who receives the gift or inheritance, the beneficiary, determines the tax-free threshold applicable to a gift or inheritance, the group threshold. The indexed group thresholds applying to a gift or inheritance for 2002, 2003 and 2004 are set out in the following table.
|
Group |
Relationship to Disponer |
Indexed Group Thresholds |
||
|
2002 |
2003 |
2004 |
||
|
€ |
€ |
€ |
||
|
A |
Son/Daughter |
422,148 |
441,198 |
456,438 |
|
B |
Parent/Brother/Sister/Niece/ Nephew/Grandchild |
42,215 |
44,120 |
45,644 |
|
C |
Relationships other than Group A or B |
21,108 |
22,060 |
22,822 |
Any other gifts or inheritance that might have been received within the same group by an individual since 5 December 1991 will also be taken into account when applying the thresholds for the purposes of calculating capital acquisitions tax. If the total value of all inheritances and gifts received since this date is above the relevant threshold, then a 20% capital acquisitions tax will apply on the difference.
The Finance Act 2000 introduced a package of measures specifically designed to reduce the impact of capital acquisitions tax where assets with average values are transferred. These measures included increased thresholds and the introduction of a single rate of tax at 20%. In addition, section 151 of the Finance Act 2000 introduced a valuable exemption from capital acquisitions tax for certain dwelling houses. The purpose of the exemption was to benefit individuals who had been living in a house for a period prior to the taking of the benefit, either by way of gift or inheritance. The exemption is not, however, intended to exempt dwelling houses taken by individuals who are residing elsewhere, or who hold an interest in another dwelling house.
The Deputy may also wish to note that tax relief is available under section 467 of the Taxes Consolidation Act 1997 where a taxpayer employs a carer to look after the taxpayer or a relative of the taxpayer who is totally incapacitated. This tax relief is available at the marginal rate of tax for expenditure not exceeding €30,000 per annum. I am advised by the Revenue Commissioners that gift tax is a self-assessment tax under capital acquisitions tax and that, in the absence of a gift tax return, form IT 38, or any other supporting documentation it is difficult for them to give a definitive answer in respect of the potential tax liability, and any interest arising, in this case.
If the beneficiary requires information in the completion of the return, he may contact the Office of the Revenue Commissioners, capital acquisitions tax unit, ESE Region, St. John's House, Tallaght, Dublin 24 at 01-4149791 to 01-4149797. It should be noted however, that under the general circumstances outlined by the Deputy, gift tax would be payable in this case under section 6 of the Capital Acquisitions Tax Consolidation Act 2003. If the individual in question is unable to discharge his liability in one payment, he may wish, under section 54 of the Capital Acquisitions Tax Consolidation Act 2003, to avail of the statutory instalment arrangement to discharge his liability over a five-year period. In these circumstances, interest is chargeable on a yearly basis.
