The Ryan Review

IT’S anti-Dublin and anti-‘Protestant’. So why hasn’t Inheritance Tax been tackled properly in budgets over the years?

Property forms the majority of most people’s estates when they pass away. If you live inside the M50, and are the offspring in a “gentleman’s family”, that is, a singleton or one of two children, then you’re going to get hammered for tax compared to the large ‘Catholic’ family down the country.

Capital Acquisitions Tax is payable by an inheriting child on any asset over €310,000. So, a singleton inheriting the family home worth say, €550,000 (the average price of a South County Dublin family home), pays €79,200 to Revenue on this alone, leaving many having to sell the house they grew up in, just to pay the tax.

Contrast the situation with a family of five who can inherit a property worth up to €1,550,000 and not pay a cent on it.

It is unfair, and it’s not quite clear why it should be so. Tax is a blunt instrument at the best of times and families have become much smaller over the decades, so bills are increasing. Michael Noonan edged out tax-free thresholds a little, but they’re still a long way from the €542,554 each child could inherit tax free in 2009.

There is an argument, and it’s a good one, about why the State should protect inheritances at all, save for farms and family businesses, but if we do, then surely it shouldn’t discriminate against those who happen to be from small families.

It’s unlikely to be top of Paschal Donohoe’s list in October, but with the surge in house prices, someone should be thinking about it.