Greens oppose ‘reducing inheritance tax for people who do not need a cut’
:: Three parties to clash as FG and FF consider rise in threshold to inherit home
THE Green Party is set to lock horns with Fine Gael and Fianna Fáil over inheritance tax.
The controversial tax is set to be one of the key battlegrounds in the new government after Leo Varadkar said he wanted to reduce the tax significantly.
However, the Taoiseach’s comments on the tax were described as “not a very good use of public money” by Green Party finance spokesperson Neasa Hourigan.
But her Fianna Fáil counterpart, Michael McGrath, weighed in behind Mr Varadkar saying his party will consider cuts to the tax if the economy improves.
The row was sparked after Mr Varadkar told an online Fine Gael conference he will “argue” in government for the tax to be reduced.
He said children should not have to pay inheritance tax on average priced houses they are left in their parents’ will.
“The average property value for example in Dublin, which would be higher than the average around the country, you shouldn’t pay any inheritance tax on that,” the Fine Gael leader said.
“You should only pay inheritance tax on the amount you inherit in excess of that. I think that’d be good principle and that’s the principle that we’ll push forward.”
The average house price in Dublin is around €438,000 while the tax-free threshold for a child receiving inheritance from their parents, including the family home, is €335,000.
Capital Acquisition Tax (CAT) is paid at 33pc on any assets or money received beyond that amount.
Mr McGrath said decisions on taxes will be made during budget negotiations should the three parties agree to go into government.
He said just because something is not contained in the programme for government does not mean it cannot be addressed if all three parties agree on the issue.
“Fianna Fáil supported increases in the inheritance tax-free thresholds in the past and will consider further changes at some point in the future if the circumstances are right, but the overriding priority for an incoming government has to be to repair and rebuild the economy, support businesses and help people get back to work,” he added.
Ms Hourigan said Mr Varadkar’s plans will narrow the tax base as the country is heading into a recession.
“Generally we would like to see the tax base expanded and reducing inheritance tax is going to benefit a section of people who do not need a tax cut,” she said.
“We are going to struggle to pay for basic services and social welfare in the next few years and giving tax breaks to people who have inherited property or large sums is not a good use of public money,” she added.
Meanwhile, Green Party deputy leader Catherine Martin described as “unhelpful” comments by Mr Varadkar on plans for a liquefied natural gas (LNG) terminal in Kerry.
The programme for government says the project will be removed from the list of State-backed initiatives which can be fast-tracked because of their strategic importance.
It also commits to banning imported fracked gas.
Mr Varadkar said the company behind the pipeline, New Fortress Energy, could still apply to build the terminal through the planning system.
Ms Martin said the Taoiseach’s comment showed the resistance in Fine Gael to stopping fracked gas coming into Ireland.
:: In an article in yesterday’s Irish Independent, it was stated that capital gains tax is also known as inheritance tax.
We are happy to clarify that the two types of taxes are separate, and that Mr Varadkar’s proposals related to inheritance tax.