Politics

‘Unfairness’ and ‘anomalies’ in inheritance tax should be considered before budget, Taoiseach says

Simon Harris suggests capital acquisitions tax changes may be relevant in context of search for ‘whole variety of housing solutions’

Taoiseach Simon Harris: Inheritance tax has 'a real impact on a son or a daughter or a nephew or niece trying to move into the family home'. Photograph: Government Information Service/PA
Cormac McQuinn
Tue Jul 16 2024 - 20:43

“Unfairness” and “anomalies” relating to inheritance tax are issues that deserve to be considered in advance of the budget, Taoiseach Simon Harris has said.

The Fine Gael leader made the remarks when asked about discussion within his party as to cuts to the tax in the budget.

Minister of State for Finance Neale Richmond last week backed a cut to inheritance tax in a comment piece in The Irish Times.

He wrote that the “current regime of capital acquisitions tax (CAT), or inheritance tax as it is better-known, is placing an undue burden on the squeezed middle”.

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[ Figuring out the date of inheritance for tax purposes ]

Mr Richmond highlighted how “someone will pay 33 per cent tax on anything they inherit over €335,000 from a parent” and added: “No parent should fear leaving their home to their loved one because of a tax.”

At a post-Cabinet press conference in Dublin, Mr Harris said he thought inheritance tax was “a legitimate point for consideration in the budget”.

He said it had “a real impact on a son or a daughter or a nephew or niece trying to move into the family home and at a time when we’re trying to come up with a whole variety of housing solutions”.

However, he also cautioned: “We have a limited pot of what we can do in the budget. There’s €1.4 billion for tax measures and the three Coalition parties will work our way through that together.

“I think it’s fair to say the overriding focus on the tax package is likely to be on the income tax side measures in the way that it has been before and we will ensure that the budget is progressive overall.”

[ The Debate: Should inheritance tax be cut in the budget? ]

Mr Harris added, “I do think issues around inheritance tax, unfairness, anomalies and also the impact on farmers and the like, are issues that deserve to be considered in the run-up to the budget.”

At Tuesday’s Cabinet meeting, Minister for Justice Helen McEntee briefed colleagues on plans to launch a recruitment competition for the vacant role of deputy Garda commissioner through the Public Appointment Services by the end of July.

A previous competition to fill the job was suspended after no suitable candidates came forward. A number of senior police officers from other jurisdictions had applied for the role but the recruitment process was boycotted by most senior Garda officers over concerns about tax liabilities on pension payments.

[ What a gift of a house means for inheritance tax ]

Meanwhile, the Taoiseach said he was looking forward to his first bilateral meeting with British prime minister Keir Starmer on Wednesday.

He said: “I’m very grateful to him for inviting me to Chequers, to be the first head of government there in his tenure, I think is a real sign of the eagerness that he has, which I share, to see a great reset of Anglo-Irish relations. I think it’s badly needed.”

Cormac McQuinn

Cormac McQuinn

Cormac McQuinn is a Political Correspondent at The Irish Times