Seán Sherlock
Question:207. Deputy Sean Sherlock asked the Minister for Finance if consideration will be given to a matter (details supplied). [39621/20]
View answerTuesday, 1 December 2020
Questions (207)
Written answers
I am informed by Revenue that for inheritance tax purposes, the relationship between the deceased person (i.e. the disponer) and the person who receives the gift or inheritance (i.e. the beneficiary) determines the maximum amount, known as the “Group threshold”, below which inheritance tax does not arise. The Group A threshold (currently €335,000) applies, inter alia, where the beneficiary is a child (including adopted child, step-child and certain foster children) of the disponer.
A foster child is treated as a child of the disponer and can avail of the Group A threshold in the following circumstances:
- in respect of an inheritance from a foster parent with whom he or she has lived, and who has cared for and maintained the child at his or her own expense, for a cumulative period of at least 5 years before the child’s 18th birthday, or
- in respect of an inheritance from a foster parent where, prior to the inheritance, the child had been placed in the care of the foster parent under the Child Care (Placement of Children in Foster Care) Regulations 1995, or the Child Care (Placement of Children with Relatives) Regulations 1995.
Therefore, the current position is that certain children in either informal long-term foster care arrangements or formal foster care arrangements can avail of the Group A tax-free threshold on inheritances from a foster parent.
Based on the information supplied by the Deputy, the foster children in this case have been placed in the care of their foster parents by the Child and Family Agency in a formal foster arrangement under the Child Care (Placement of Children in Foster Care) Regulations 1995. If this is the case, these foster children can avail of the Group A threshold in respect of any inheritances that they receive from their foster parents in the same way as the natural children of those foster parents.
There appears to be a misunderstanding in the information supplied that foster children in formal foster care arrangements need to be maintained at the foster parent’s own expense. This is not the case. This condition only applies in respect of informal foster arrangements. I have been informed by Revenue that it is satisfied that the material published on its website is clear and accurate in this regard.