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Budget 2018

Dáil Éireann Debate, Tuesday - 3 October 2017

Tuesday, 3 October 2017

Ceisteanna (123)

Tony McLoughlin


123. Deputy Tony McLoughlin asked the Minister for Finance his plans to reduce the rate of inheritance tax in budget 2018; and if he will make a statement on the matter. [41934/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Capital Acquisitions Tax, CAT, is the overall title for both Gift and Inheritance Tax. The tax is charged on the amount gifted to, or inherited by, the beneficiary of the gift or inheritance.

CAT is charged at 33% to the beneficiary on amounts received by gift or inheritance, beyond certain lifetime tax-free amounts determined by the relationship between the beneficiary and the person making the gift or the inheritance. The rate is the same regardless of the nature of the gift or inheritance (i.e. cash or different types of property), although certain reliefs and exemptions can apply, notably for transfers of farms and businesses and of the residential property in which the beneficiary lives, subject to certain conditions.

There are three tax-free thresholds depending on the relationship between the disponer and the beneficiary with CAT applying over the thresholds.

Considerable change has already been made to three CAT thresholds A, B and C in recent budgets:

- Group A increased from €225,000 to €280,000 in Budget 2016, and to €310,000 in Budget 2017. It applies where the beneficiary is a child (including certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an absolute inheritance from a child.

- Group B threshold rose from €30,150 to €32,500 in Budget 2017. It applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer.

- Group C threshold rose from €15,075 to €16,250 in Budget 2017. It applies in all other cases.

As with all other areas of tax, the details of CAT, including the rate charged, are kept under review as part of the annual Budget and Finance Bill process. I am sure the Deputy will understand that I am not in a position to comment on such matters in advance of the Budget.