Dáil Éireann Debate, Tuesday - 30 April 2013
180. Deputy Pearse Doherty asked the Minister for Finance the amount that would be raised for the Exchequer by raising the rate of capital acquisitions tax from 33% to 40% and lowering the thresholds to €187,000 for the child-parent category, €25,000 for the lineal ancestor category and €12,500 for the any other person category. [20062/13]
View answerI am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer from increasing the Capital Acquisitions Tax rate by 7% to 40%, based on the expected outturn in 2013, could be in the region of €63 million, assuming no change in the existing thresholds. The current group tax free threshold amounts for Capital Acquisitions Tax (CAT) are: €225,000 for group A (gifts/inheritances from parents to children), €30,150 for group B (gifts/inheritances from grandparents to grandchildren, from uncles/aunts to nieces/nephews, and between siblings) and €15,075 for group C (all other gifts/inheritances). I am advised by the Revenue Commissioners that the additional full year yield from existing taxpayers from reducing the thresholds for CAT to €187,000 for Group A, €25,000 for Group B, and €12,500 for Group C, as compared with the current thresholds, and applying the proposed rate of 40% to the additional amounts thus brought into charge is estimated to be of the order of €31 million.
Revenue do not receive information on gifts and inheritances which currently do not have to be declared so it is not possible to estimate the potential yield if such benefits were brought into the tax net.
It should be noted that these estimates are based upon an assumption that there would be no behavioural impact of these changes, which could lead to a less than expected impact on Exchequer yield. In addition, the realisation of any estimated yield from an increase in taxation on assets relating to property is subject to movements in the value of such assets, which are currently occurring in the economy.
