Capital Acquisitions Tax(CAT)changes demanded at LCC

LAOIS County Council is demanding that the Minister for Finance, as part of preparations for Budget 2027, reform the Capital Acquisitions Tax regime by introducing a single universal lifetime tax-free inheritance threshold, arguing that the existing measures are discriminatory.

The motion was brought to the latest meeting of LCC by Councillor Connor Bergin who began his case for reform to the council by explaining how the existing system worked.

While it is sometimes called “Gift Tax” or “Inheritance Tax”, the official term is Capital Acquisitions Tax and under the CAT scheme there are multiple thresholds. The main threshold, Threshold A, allows for parents giving gifts to their children; under this grouping a parent can give their child up to €400,000 throughout their lifetime or upon their death tax free. Group B, which includes gifts to brothers, sisters, nieces and nephews, are only allowed a tenth of the amount Group A are afforded, €40,000.

Councillor Bergin considered this discriminatory and said:

“So it' s a huge anomaly I think we need to prepare to address. And now I’m not saying inheritance tax needs to be scrapped altogether, but we really do need to question whether the relationship based system is the best for inheritance in Ireland. Families don't always fit neatly into the categories at the moments and the state shouldn’t ignore those realities when organising the tax system.” Another example the Councillor highlighted as unfair was that of the discrimination against couples who weren’t married under the tax system who, despite cohabiting for potentially just as long as a married couple, were being stung for a tax burden many times higher than that of their married peers.

The motion was seconded by Councillor Seamus McDonald who argued that the council should send a letter to the Minister for Finance urging him to do something about what was a quite unfair state of affairs.

According to Fianna Fáil Councillor John Joe Fennelly who brought the matter up at a party conference, the reason nothing had been done about it and the reason nothing would likely be done in this year’s budget in relation to CAT was because of Revenue. According to the councillor, he had been privately told by members of the government that the Revenue Commissioners didn’t want to change the existing structure as it was pulling in so much money to the state coffers.

Mr Fennelly still believed however that the Minister of Finance should go into Revenue and force through the changes, regardless of what their quibbles were; a sentiment echoed by Councillor Aisling Moran who agreed that CAT was such a money-spinner for the Revenue Commissioners that it wasn’t likely they would budge on it without a fight.

Funded by the Local Democracy Reporting Scheme