Vol. 480 No. 2
144 Mr. N. Ahern asked the Minister for Finance if he will make a statement on the taxation of individuals' estates in relation to the charge that single people are discriminated against vis-à-vis married people in this manner and in respect of the taxation thresholds when transferring their estates. [13404/97]
Capital acquisitions tax, is due whenever a person receives a gift or an inheritance, subject to certain exemptions, thresholds and reliefs. This tax is based on the concept of the relationship between the recipient and the disponer. There are three categories of disponer — Class I, £185,550, transfers from a parent to a child, Class II, £24,740, transfers between certain other relatives and Class III, £12,370, transfers between strangers. Transfers between spouses either by way of gift or inheritance are exempt from capital acquisitions tax.
In addition to the three thresholds and the spouse exemption there is also a relief for elderly siblings who live together. This relief allows the value of a house or part of a house which is inherited to be reduced for CAT purposes by £80,000 or 60 per cent whichever is the lesser. This relief, which was introduced in 1991, recognises the special circumstances of elderly siblings living together, and eased the tax burden associated with inheritances in such situations. In this year's Finance Act the relief was amended to the effect of increasing the threshold from £60,000 to £80,000 in the case of relevant inheritances taken on or after 10 May 1997.
Individuals who reside together and are neither married nor come within the remit of the elderly siblings relief are treated as strangers for CAT.
The application of the CAT arrangements to various categories of recipients is kept under review in particular from the point of view of anomalies. However the Exchequer cost implications of any changes in the current arrangements would have to be borne in mind.
