Taoiseach rules out reduction in amount of money parents can leave to children tax-free

Speaking at Fianna Fáil's think-in in Mullingar, Micheál Martin said 'there is no appetite' in Government to follow the recommendation from the Commission of Taxation

Mr Martin said such a proposal would be unfair as this is largely income which has already been taxed.

Taoiseach Micheál Martin has effectively ruled out any reduction in the thresholds in the amount of money parents can leave their children, saying it “would disadvantage many families”.

Responding to reports the Commission of Taxation has said there should be a “substantial” reduction in the amount of money parents can leave to their children tax-free, Mr Martin slapped that proposal down hard.

Speaking at Fianna Fáil's think-in in Mullingar, Mr Martin said “there is no appetite” in Government to follow that recommendation.

“I would say that I don't believe there's an appetite in Government to reduce that threshold. Many, many families and family homes would be disadvantaged by that,” he told the Irish Examiner.

He said such a proposal would be unfair as this is largely income which has already been taxed.

Under capital acquisition tax rules, a child can inherit €335,000 from their parents before they have to pay tax at 33%.

Back in 2009, a child could inherit or be gifted €542,544 from their parents before having to pay tax, with the rate at the time being 22%.

“We're talking after all about people who have bought their family homes, with after-tax income,” he said. 

“So no, I think that proposal to say to people you've worked hard all your life, you've bought your house, and so on like that. They are saying ‘actually, we want to take more off you when you die, and you can't give it to your family members’. I think there's an issue with that in terms of fairness. So I don't detect an appetite for that specific measure,” he said.

Last November, Finance Minister Paschal Donohoe was forced into an embarrassing U-turn on a budget measure to try to tax soft loans for house deposits given by parents to their children.

Meanwhile, former junior minister Robert Troy, who had to resign from his position over errors in his property declarations, said he would be a candidate in the next general election.

“For my own part, I dealt with the unintentional errors that I made. I issued a fulsome apology, and I do so again today,” Mr Troy told reporters.

He said he was still prepared to answer questions on any matter should he be required to do so.

When asked by reporters about his involvement in the State’s rent-a-room scheme, which would allow a person earn up to €14,000 a year tax-free, Mr Troy said he let a room and advertised it.