Families gain from inheritance tax change

THERE was some cheer for people with assets who want to pass them on to their children without paying tax.

The tax-free threshold for inheritance tax went up to €335,000.

This means a parent can leave a son or daughter an inheritance, typically a house, worth up to this amount before capital acquisitions tax (CAT) at 33pc kicks in.

The so-called Group A taxfree threshold was €320,000.

Finance Minister Paschal Donohoe said families were eager to avoid paying tax on their assets when they are passing them on.

“I recognise that there are ongoing concerns about the capital acquisitions tax impact on the inheritance of the family home.

“Therefore, I have decided to increase the lifetime Group A tax-free threshold which broadly applies to transfers between parents and their children from €320,000 to €335,000,” he told the Dáil.

There was no change in the other tax-free thresholds for inheritance tax.

Partner at KPMG Eoghan Quigley said the increase of the tax-free threshold for children inheriting property and other assets from their parents to €335,000 represents a steady increase in the threshold over the past number of years.

Tax experts said the thresholds are low by international standards.

The tax-free threshold for inheritances from parents to children was as high as €542,544 in 2009. The financial crash saw it radically reduced.

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