Massive hike in inheritance tax take since 2010
Published 23/08/2016 | 02:30
Revenue collected €165m more in inheritance tax last year than in 2010, sparking calls for reforms to be made in the forthcoming Budget.
The Government has already promised to make it easier for parents to will the family home to their children amid fears that rising house prices are leaving them with massive bills.
New figures now show that changes made to inheritance tax thresholds during the economic downturn have resulted in a major windfall for the State.
In 2010, Revenue collected €76.5m under 'Category A' Capital Acquisitions Tax, which applies to people inheriting directly from their parents. However, last year's figure rose to €156m. Category B, which covers gifts left to parents, nieces/nephews and grandchildren, jumped from €121.7m in 2010 to €183m last year.
And all other inheritance tax has gone up from €34.8m to €58.9m.
Fianna Fáil finance spokesperson Michael McGrath said any changes to inheritance tax thresholds in forthcoming budgets should reflect the diversity of family structures in society.
In the Programme for Government, Fine Gael promised to raise the threshold at which children pay tax on the family home from €280,000 to €500,000.
This means the majority of bequests will not attract tax - although many family homes in Dublin and some farms will still be hit.
The figures show that in 2015 one in three inheritance cases was in respect of nieces and nephews followed by gifts/inheritances involving what is known as "strangers in blood" (23pc).
A total of 21pc were in respect of a sibling, while only 18pc of cases involved a child.
"It is every person's wish to provide financial security for family members and people close to them," Mr McGrath said.
"Some progress has been made in relation to inheritances between parents and their children.
"However, there are many other issues which must also be considered including the cases of other family members and the interest rate which applies when a person seeks a deferral of a Capital Acquisitions Tax bill."
He added: "This is currently set at a penal rate of 8pc.
"I look forward to debating these issues with the Minister for Finance over the coming weeks."