Michael Ring
Ceist:370 Mr. Ring asked the Minister for Finance if he will abolish inheritance tax, stamp duty or other tax imposed in relation to a son or a daughter inheriting a homeplace or house. [21001/98]
Written Answers. - Inheritance Taxes.
I have no plans to abolish the taxes in the circumstances referred to by the Deputy. The position is that capital acquisitions tax (CAT) is due whenever a person receives a gift or an inheritance, subject to certain exemptions and reliefs. A son or daughter may receive up to £188,400 from his or her parents free of CAT. This exempt amount is described as the Class I threshold. Only the value of benefits received in excess of the threshold gives rise to a charge to CAT. Since 1990 the CAT thresholds have been indexed annually by reference to the consumer price index.
Where the beneficiary has received previous gifts or inheritances since 2 June 1982, the value of these benefits is added to the value of the current benefit when determining the CAT liability. This process is known as aggregation. The rate of CAT on inheritances is nil up to the appropriate threshold rate, 20 per cent on the next £10,000, 30 per cent on the next £30,000 and 40 per cent on the balance.
Probate tax is charged at a rate of 2 per cent on the net value of non-exempt assets left by a deceased. Estates with a taxable value of £10,980 or less are exempt from probate tax and outstanding debts of the deceased, as well as funeral expenses, may be deducted as expenses of the estate in arriving at the taxable value. Furthermore, the share of the family home passing to dependent children or dependent relatives of the deceased is exempt.
Stamp duty is not charged on property transferring on death. Furthermore, death is not an occasion of disposal for capital gains tax and in any event capital gains tax is not charged on the disposal of one's principal private residence.
In view of the reliefs that exist for the cases described by the Deputy, the impact of these taxes on sons and daughters is already mitigated to a significant degree.