Senator Mary White (FF) has called for the threshold and rate of inheritance tax applying to those receiving an inheritance from their deceased parents to be restored to 2008 levels.
Speaking about the tax, Senator White said: “This is a brutal and crippling tax and it has a disproportionate effect on people living in Dublin where house values have risen considerably in recent times.
“For instance, in 2008 the inheritance tax cost to a child on a family home in Dublin worth €600k was €11,500.
“Today, the tax cost to them for the same value house would be €123,750.
“The annual deadline for this to be paid to Revenue is October 31st – irrespective of when, in the previous 12 months, the inheritance was received.
“This is putting enormous strain on people and often results in the family home having to be sold just to pay the tax.
“The current rate and threshold were introduced at a time when property prices had collapsed, with the aim of getting some flow of tax from a virtually non-functioning marketplace. However, they have not been adjusted back up since property prices in Dublin began to rise again.
“The circumstances are completely different now and the current regime is excessively punitive. The Labour Party sold this as a ‘wealth tax’ but the reality is that it is ordinary families who are by no means wealthy that are worst hit.
It is wholly unreasonable and needs to be changed immediately.”
The changes proposed by Senator White are:
- That the current threshold for the tax (€225K) be restored to €521K
- That the current tax rate (33%) be restored to 20%
- That the payment period be extended by a further 12 months to allow for at least a year to raise the substantial funds required to pay the tax bill.
“The effect of these measures on the government’s overall tax take will be minimal as the total tax from Gift and Inheritance tax is less than 1% of its net tax income. However the positive effect from lifting this unnecessarily high burden from the lives of those receiving an inheritance from their parents will be substantial”.
Senator Mary White is calling on the Minister for Finance to implement her proposals in full and with immediate effect in the upcoming budget.