Inheriting property from relatives? You will pay less tax post-Budget 2017
People inheriting property from relatives will pay less tax, Minister Michael Noonan indicated.
The threshold – effectively the amount that passed on without incurring tax – has been increased.
The amount a parent can pass on to a child has risen by €30,000.
The children can now inherit property or other assets to the value of €310,000 without paying tax.
Amounts over this are taxable at 33pc.
For inheritances from other close relatives the threshold has also widened. It goes from €30,150 to €32,500, known as category B.
Those inheriting from someone they are not related to can now avail of a tax-free threshold of €16,250, up from €15,075.
The was an increase of 8pc in categories B and C
The tax is known as capital acquisitions tax.
Mr Noonan told the Dáil: “During the crisis, it proved necessary to reduce the thresholds at which capital acquisitions tax applied to preserve the level of revenue as far as possible.
“Our improving economy means that increasing asset prices are resulting in higher tax demands when family homes are being passed from one generation to the next.”
He said he would revisit the tax-free thresholds in the coming years with view to increasing them further.
Solicitor Susan Murphy of MakeMyWill Solicitors said the increases were welcome.
But she added: “This might sound positive but when you consider the 8pc equals an increase of just €2,412 for inheritances in the group B category, for gifts to parents, siblings, nieces and nephews, it’s not really scratching the surface of a problem facing many Irish people inheriting assets.”
She said the notion of targeting a specific group of people, those without children, so their beneficiaries can take on the main inheritance tax burden for the State “seems ludicrous and antiquated”.
Ms Murphy added: “The Government needs to adjust their thinking and address a modern Ireland when reviewing the threshold increase over the coming years.”