Vol. 503 No. 3
297 Mr. Currie asked the Minister for Finance the position on inheritance tax of two unrelated people who jointly purchased a house on a mortgage in 1980 (details supplied); and if he will make a statement on the matter. [9918/99]
The inheritance tax position regarding two unrelated people who jointly own a house is as follows: If one of the joint owners receives the other owner's share of the house through inheritance, capital acquisitions tax (CAT) will be chargeable on the value of that share received less any qualifying threshold. In the case of two unrelated people, the qualifying threshold is £12,860. Where the beneficiary has received previous inheritances since 2 December 1998, 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.
I very much appreciate the concerns which have been raised and I recently undertook in the Dáil that prior to the next budget, I would examine the CAT code in some detail. I want to see if we can come up with a solution that alleviates the tax burden and, at the same time, is fair to all who face similar circumstances in relation to CAT on the domestic residence. However, it must be remembered that any changes in the CAT area are costly and, for this reason, must be looked at in a budgetary context when choices have to be made on which elements of the tax system to address.
