James Lawless
Question:326. Deputy James Lawless asked the Minister for Finance to examine a matter (details supplied); and if he will make a statement on the matter. [56783/23]
View answerWednesday, 17 January 2024
Questions (326)
Written answers
As the Deputy may be aware, for the purposes of Capital Acquisitions Tax (CAT), the relationship between the person who provides the gift or inheritance (i.e. the disponer) and the person who receives the gift or inheritance (i.e. the beneficiary) determines the maximum life-time tax-free threshold. This is known as the “Group threshold” below which gift or inheritance tax does not arise and relates to the allowance referred to in your correspondence. Where a person receives gifts or inheritances in excess of their relevant tax free threshold, CAT at the 33% rate applies on the excess over the tax free threshold.
The Group A threshold (currently €335,000) applies where the beneficiary is a child of the person giving it. The Group B threshold (currently €32,500) applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer. The Group C threshold (currently €16,250) applies in all other cases.
In the relation to the query regarding the specific circumstances as outlined by the Deputy, it is worth noting that there is an exemption from CAT where dwelling houses are bequeathed by individuals. The dwelling house exemption is available, subject to certain conditions, to successors of the house who:
* have lived there for a specified period of time before the inheritance,
* will continue to live there for a specified period of time after the inheritance, and
* who have no beneficial interest in any other residential property at the date of the inheritance.
The policy rationale behind the dwelling house exemption is to protect the family home by ensuring that a beneficiary who has been living with the disponer, and will continue to reside there after the inheritance, does not have to sell that family home to pay a CAT liability and thus will continue to have somewhere to live. It is not necessary for the beneficiary of an inheritance under the dwelling house exemption to be a child or relative of the disponer.
Further information regarding the dwelling house exemption is available on the Revenue website at the following link: www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/dwelling-house/index.aspx.