Any increase in inheritance tax-free threshold to be targeted at children
Any Budget measures to increase the inheritance tax-free threshold will be targeted at children being left an estate, not siblings, Finance Minister Michael Noonan has indicated.
A tax-free threshold of €30,150 currently applies where the beneficiary of a will is a sibling or a more distant relative, such as a niece or nephew.
Fianna Fáil TD Jim O'Callaghan told the Irish Independent that this sum was too low and the estates of people who don't have children "are eaten up completely".
He asked Mr Noonan if, as well as increasing the €280,000 threshold for children in Budget 2017, he would increase the threshold for siblings.
He said it particularly affected those who wanted to leave something for a childless brother or sister so that they were "provided for in their old age".
The Dublin Bay South TD last night said the low threshold for siblings was an issue that "affects a lot of people in my constituency".
He continued: "I meet people who aren't married or who don't have children. Their estate is penalised much more than anyone else's."
Mr O'Callaghan said that such people left their estates to a sibling or niece or nephew and the €30,000 tax-free threshold was "extremely low".
However, Mr Noonan replied to Mr O'Callaghan's question indicating that his priority was to raise the tax-free Capital Acquisition Tax (CAT) threshold for estates left to children, a process that began last year.
He highlighted the Programme for Partnership government agreed between Fine Gael and Independent TDs, which commits to eventually raising that threshold to €500,000.
Mr Noonan said it wouldn't be "appropriate" for him to comment on what CAT measures, if any, were being considered in Budget 2017 but said he would be examining the scope for changes to other categories in the future.
Mr O'Callaghan said he could understand Mr Noonan's priority in raising the threshold for children. He said the threshold was low as well "particularly in Dublin, if they're inheriting a property".