Every family member inheriting an asset should be treated equally, MEP says

James Cox

Fianna Fáil MEP Billy Kelleher has said that inheritance tax exemption allowances should be combined for all family members to "end discrimination and increase fairness".

Kelleher, an MEP for Ireland South, said that he agrees with Taoiseach Micheál Martin that reform is needed in the system.

“At present, a person can cumulatively inherit €460,000 under the three difference grades without paying inheritance tax.

“However, there is a major imbalance when it comes to each of the grades: €400,000 for Grade A which is usually parent to child, €40,000 for Grade B which is usually aunt/uncle to nephew or niece, and €20,000 for other familial relationships under Grade C.

“Family formation is no longer as it was in previous times. There are couples who, for different reasons, may not have children of their own. In many cases, their assets will be inherited by nieces and nephews but under the existing system, they will pay a 33 per cent tax on any inheritance over €400,000.

“In many cases, it will force them to sell off the asset, usually a home, just to pay the tax bill."

He added: “What I think needs to happen is all a person’s allowances to be combined into one pot and treat all people inheriting from family members equally.

“In general, we also need to see an increase in the thresholds for everyone, proportionate to the significant increase in house prices over the last two decades.

“Now is the time to reform the system when our tax base is strong, and especially considering when the tax take from such inheritance and gifts taxes have doubled in recent years."