There is “no appetite” in Government to reduce the inheritance tax threshold, Taoiseach Micheál Martin has said.
Speaking at the Fianna Fáil think-in being held in Mullingar, Co Westmeath, Mr Martin said he believed many families would be “disadvantaged” if the thresholds were reduced.
His comments come after reports suggested the Commission on Taxation and Welfare has proposed to drastically reduce the amount of money parents can leave to their children tax-free.
A report by the Commission is set to be published on Wednesday.
“I don’t believe there’s an appetite in Government to reduce that threshold. Many, many families and family homes, I think, would be disadvantaged by that,” the Taoiseach said.
“Our taxation system is very progressive. Those on the highest earnings, pay the highest amount of tax. I think the top 20 per cent pay up to 80 per cent of income tax for example.
“So I think that proposal, to say to people ‘you’ve worked hard all on your life, you’ve bought your house, but now actually we want to take more off you when you die and you can’t leave it to family members’, I think there’s an issue with that in terms of fairness,” he added.
Currently, children can inherit up to €335,000 from a parent without having to pay Capital Acquisitions Tax (CAT). Anything beyond that figure is subject to tax at 33 per cent.
‘Attack on working families’
The suggestion was also criticised by a number of the Taoiseach’s coalition colleagues.
Fine Gael TDs Neale Richmond and Bernard Durkan, as well as Senator Maria Byrne said such a measure during a cost-of-living crisis would amount to “an attack on working families”.
In a statement released on Monday afternoon, the three members of Fine Gael’s finance committee “completely rejected” the move, adding it would be “completely unfair on all families”.
“This proposal is utterly appalling. It comes at a time when house prices are already high, and families are faced with a cost of living battle.
“People who work all their lives to put a home over their heads and provide for their family should not be punished for their hard work when they wish, at the time of their choosing or indeed their passing, to provide their children with something to help secure their future,” their statement said.
“Young people across Ireland are following in the footsteps of their parents and are working hard to provide for their future, their families and homes of their own. Parents should not have to worry about their children paying this tax,” it added.
Budget 2023 will be unveiled on Tuesday, September 27th.