Donohoe is urged to reduce the tax burden on survivors




Minister of Finance Paschal Donohoe. Photo: Steve Humphreys
Minister of Finance Paschal Donohoe. Photo: Steve Humphreys

Philip Ryan

Minister of Finance Paschal Donohoe comes under heavy pressure from his Fine Gael colleagues to reduce the burden of inheritance tax on surviving relatives in the next budget.

Fine Gael ministers and backbench TDs demand that Mr. Donohoe make a commitment to raise the threshold for paying inheritance tax to € 500,000, as set out in the Government Program.

The government raised the threshold for the purchase of capital rights (CAT) from € 280,000 to € 310,000 in 2017, but did not make any changes to last year's budget.

This means that children do not have to pay taxes on their inheritance of up to € 310,000 left by their parents.

Fine Gael TD's, especially those based in Dublin, come under pressure from voters to fulfill the promise the party has made in forming the minority government.

Oireachtas Budgetary Oversight Commission President Colm Brophy said he would like to see the costs of inheritance tax being covered in the October budget. Mr. Brophy told the Sunday Independent that he expects his commission to examine proposals for inheritance tax for the budget.

"My personal opinion is that I would like to see that we raise the threshold for inheritance tax," he said.

"It is an area that needs to be looked at, because a number of families, especially families with one child, can be caught in a situation where a family home has to be sold in the fear that they will be saddled with taxes. "

Dublin Bay South TD Kate O'Connell also said that people who are forced by a death will be forced to sell their townhouses to pay taxes.

"There is a commitment in the Government Program that we would raise the threshold of inheritance tax to € 500,000, and I hope this is the budget that we can finally fulfill," said O'Connell at the Sunday Independent.

"Children who inherit their parental home can currently bear the responsibility for paying an invincible tax assessment, which [coupled with the death of their parents] can be devastating.

"Many people just can not afford it and are forced to sell the parental home to pay inheritance tax, possibly for buyers who are not interested in living in the house, who have no connection with the area or who decide to use for short-term rentals with a huge profit.

"The affected child then has to try to live somewhere else, with what can still be left of the sale of their parental home," he added.

At least one Minister of Fine Gael is deemed to have put the issue of inheritance tax directly with Mr Donohoe.

The Government Program states that the current administration "works together with the Oireachtas to raise the A capital purchase tax threshold (including all gifts and inheritances from parents to their children) to € 500,000".

Before the recession, a parent could leave € 542,000 to each child without paying taxes. In 2012, however, this was reduced to € 225,000 as part of a series of savings measures that increase the budget cuts.

The current band A threshold of € 310,000 applies to all children, including an adopted child, stepchild and also certain foster children.

A brother, sister, niece, nephew or direct ancestor of the deceased must start paying the tax on capital purchases for everything they have been left behind by a family member worth more than € 32,500.

Sunday Independent


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Donohoe is urged to reduce the tax burden on survivors




Minister of Finance Paschal Donohoe. Photo: Steve Humphreys
Minister of Finance Paschal Donohoe. Photo: Steve Humphreys

Philip Ryan

Minister of Finance Paschal Donohoe comes under heavy pressure from his Fine Gael colleagues to reduce the burden of inheritance tax on surviving relatives in the next budget.

Fine Gael ministers and backbench TDs demand that Mr. Donohoe make a commitment to raise the threshold for paying inheritance tax to € 500,000, as set out in the Government Program.

The government raised the threshold for the purchase of capital rights (CAT) from € 280,000 to € 310,000 in 2017, but did not make any changes to last year's budget.

This means that children do not have to pay taxes on their inheritance of up to € 310,000 left by their parents.

Fine Gael TD's, especially those based in Dublin, come under pressure from voters to fulfill the promise the party has made in forming the minority government.

Oireachtas Budgetary Oversight Commission President Colm Brophy said he would like to see the costs of inheritance tax being covered in the October budget. Mr. Brophy told the Sunday Independent that he expects his commission to examine proposals for inheritance tax for the budget.

"My personal opinion is that I would like to see that we raise the threshold for inheritance tax," he said.

"It is an area that needs to be looked at, because a number of families, especially families with one child, can be caught in a situation where a family home has to be sold in the fear that they will be saddled with taxes. "

Dublin Bay South TD Kate O'Connell also said that people who are forced by a death will be forced to sell their townhouses to pay taxes.

"There is a commitment in the Government Program that we would raise the threshold of inheritance tax to € 500,000, and I hope this is the budget that we can finally fulfill," said O'Connell at the Sunday Independent.

"Children who inherit their parental home can currently bear the responsibility for paying an invincible tax assessment, which [coupled with the death of their parents] can be devastating.

"Many people just can not afford it and are forced to sell the parental home to pay inheritance tax, possibly for buyers who are not interested in living in the house, who have no connection with the area or who can decide to use for short term rentals with a huge profit.

"The affected child then has to try to live somewhere else, with what can still be left of the sale of their parental home," he added.

At least one Minister of Fine Gael is deemed to have put the issue of inheritance tax directly with Mr Donohoe.

The Government Program states that the current administration "works together with the Oireachtas to raise the A capital purchase tax threshold (including all gifts and inheritances from parents to their children) to € 500,000".

Before the recession, a parent could leave € 542,000 to each child without paying taxes. In 2012, however, this was reduced to € 225,000 as part of a series of savings measures that increase the budget cuts.

The current band A threshold of € 310,000 applies to all children, including an adopted child, stepchild and also certain foster children.

A brother, sister, niece, nephew or direct ancestor of the deceased must start paying the tax on capital purchases for everything they have been left behind by a family member worth more than € 32,500.

Sunday Independent


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