A campaign group has described Ireland’s inheritance tax system as “unfair” and “discriminatory” towards childless people, amid reports that changes to the regime are being considered ahead of October’s Budget.
The Summer Economic Statement, published earlier this week, indicated there may be reform of inheritance tax rules for people who want to leave their estate to a relative.
However, it has been reported that advice from the Tax Strategy Group warned that introducing a single inheritance tax threshold that would treat relatives in the same way as children would carry a significant cost for the Exchequer.
Speaking on RTÉ’s Drivetime, End Discrimination in Inheritance Tax Campaign Group spokesperson James Sexton said Government leaders had acknowledged shortcomings in the current system.
“Minister Harris and the Taoiseach have both acknowledged the fact that the current inheritance tax system is unfair and discriminatory, and there is an acknowledgement of that, but also a willingness to reform that system,” he said.
Mr Sexton said there were “very serious equality and discriminatory concerns” that needed to be addressed.
He said there are 177,000 cohabiting couples and an estimated one million childless people who are not treated “equitably and fairly” under Ireland’s inheritance tax laws.
The Tax Strategy Group prepares annual papers on tax policy options for the Government but does not make policy decisions.
Mr Sexton said his group is calling for the introduction of an index-linked lifetime tax-free inheritance threshold of €460,000 for every citizen.
He said a child inheriting a €400,000 family home would currently face no inheritance tax bill, while a brother, sister, nephew or niece inheriting the same property from a childless relative could face a tax bill of almost €119,000.
He said a lifelong friend, carer or neighbour inheriting the same property could face a tax bill of more than €125,000.
“This is not a fair and equitable inheritance tax system,” he said.
Mr Sexton said the campaign was seeking “fairness and equality” rather than tax cuts.
“It just so happens it pertains to inheritance tax,” he said.
“It is the price to be paid for living in a democracy where every citizen is treated equitably and fairly.”
It is a long-standing practice for the Minister for Finance not to comment in advance of the Budget on tax matters that may form part of budget decisions, and no decisions have yet been made.