Tax changes promised in the Government programme for partnership will decrease or eliminate completely inheritance tax for thousands of people in the coming years.
Under the changes, once they are implemented, children inheriting the family home will not pay tax on the first €500,000 value of the estate, which should mean the majority of bequests will not prompt tax demands.
However, while the Government is planning to raise the threshold, it is not proposing to cut the 33 per cent tax rate applied to bequests over the threshold.This rate increased in 2009 from 20 per cent.
In the last budget, Minister for Finance increased the thresholds – which had fallen after the economic crisis broke in 2008 – from €225,000 to €280,000.
he concessions given in the last budget will cost the exchequer €30 million annually, though the latest measures will cost €75 million each year.
In its manifesto, Fine Gael said: “We will improve the tax treatment of gifts and inheritances from parents to young adults, by increasing the capital acquisitions group-A threshold to €500,000.”