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 Header Item Ceisteanna ó Cheannairí - Leaders' Questions (Continued)
 Header Item Death of Former Member: Expressions of Sympathy

Wednesday, 6 November 2019

Dáil Éireann Debate
Vol. 988 No. 7

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(Speaker Continuing)

[The Taoiseach: Information on Micheál Martin Zoom on Micheál Martin]  I am aware that the Deputy has campaigned successfully for us to go ahead with a new study on sexual violence in Ireland, which is being done. We are also providing additional resources and training to gardaí, as I mentioned earlier.

Deputy Maureen O'Sullivan: Information on Maureen O'Sullivan Zoom on Maureen O'Sullivan We have a complicated system in respect of capital acquisitions tax. This tax has been a feature of the tax system since 1976. The 2003 Act sets out how the tax is to be charged and calculated. The Act provides for two types of tax, namely, gift tax and inheritance tax. I wish to raise a number of anomalies in the treatment of certain people when it comes to this tax. There is very favourable treatment for some individuals while others are treated unfavourably. It is tax justice for some and injustice and unfairness for others. One group that is treated unfavourably comprises those who cohabit. They are treated differently from those who are married or in civil partnerships. Spouses and civil partners who inherit from the other person in the relationship do not pay capital acquisitions tax, which is very different from the position of those who cohabit. That is one anomaly.

There is another anomaly for cohabitants. When a cohabitant dies and provides for the surviving cohabitant, the latter will pay tax. If one cohabitant dies without leaving anything to the surviving cohabitant, the latter can apply to court for a share in the estate. If that is granted, he or she will pay no tax. There is unfavourable treatment for a cohabiting couple if they are two sisters or brothers or other family relations or two friends or where one is a long-time carer. A shared home cannot be gifted to the surviving person in those relationships without a considerable tax burden being imposed.

The term "disponer" is used in the 2003 Act to refer to a person who is providing a benefit to others. It is the relationship between the disponer and the person benefiting that will make a very appreciable difference to the tax being paid on inheritance or gifts. The child of a disponer will have a tax free allowance almost ten times greater than another family member. A disponer who has children enjoys far more advantageous tax terms than a disponer who does not. While efforts must be made to ensure that wealthy people do not avoid or evade tax, certain relationships are penalised when it comes to capital acquisitions tax. There are significant tax exemptions and concessions for relationships which are formalised through marriage and civil partnership but not for cohabitants, regardless of whether the relationship is intimate, and most definitely not for single people who do not have children. The person receiving there pays very high tax.

The Minister's reply when I raise this issue is usually to say that the State pledges to protect the institution of marriage, including civil partnership. Really, however, this is very lucrative for the State but unfair to those who are not being treated like others. This matter must be examined and addressed.

The Taoiseach: Information on Leo Varadkar Zoom on Leo Varadkar I am at a little bit of a loss once again. As is often the case, the Deputy perhaps knows the detail and facts around tax law better than I do. I may have to come back to her with a more substantive response at another date. As she stated, capital acquisitions tax involves two elements. One is inheritance tax and the other is gift tax. In the two most recent budgets, we have reduced inheritance tax. The Independent Alliance was keen for us to do that and, as a Government working together, we were happy to do it. It is our objective to allow the average person to pass on the average house in Dublin and around the country to his or her children without the latter having to pay any inheritance tax on it. Our tax code discriminates positively in favour of inheritances and gifts between spouses and from parents to children. That is treated very differently from an inheritance or gift given to someone to whom one is not related or to whom one is more distantly related.

I understand the point the Deputy makes and where she is coming from in the context of cohabiting. However, there is a difference between cohabiting and being married. Marriage and civil partnership are different relationships to cohabitation. Our law recognises this by favouring those who are married or in civil partnerships over those who are not. It would be difficult and fraught to try to change that or even to define clearly in tax law what is cohabiting and what is not. It is very clear whether one is married or a civil partner as one has to go through a legal process. There is no legal process of which I am aware to show that someone is a cohabitee or not. As the Deputy knows, the Finance Bill is currently being debated. She may take advantage of those debates on the Bill to propose amendments which the Minister for Finance, Deputy Donohoe, could consider.

Deputy Maureen O'Sullivan: Information on Maureen O'Sullivan Zoom on Maureen O'Sullivan I have raised the matter with the Minister for Finance but lack of progress with him made me raise it here today. With regard to cohabiting, one could have two sisters or brothers who never marry and share a home. There will be a tax burden for the surviving sister or brother unless he or she can prove dependency, which is unfair. Someone who does not marry or have children and works for 40 years may be able to buy a house and have some savings but the tax burden for whoever inherits that property and savings will be considerable. It is as if they are being penalised for not marrying and having children.

The reality is that there is significantly preferential tax treatment in respect of inheritances and gifts for married couples, civil partners and the children in those relationships. We even have superannuation schemes where an employee pays for the spouse and children benefit even though he or she has not married and does not have children. There are a great many anomalies there and there is a great deal of unfairness. It is almost like there are tax penalties for those who do not get married or have children or for those people who live in a committed although not intimate relationship who cohabit. We must amend the inheritance tax rules.

I like the Taoiseach's optimism to the effect that I could table an amendment that would be accepted. I do not think so. In the interests of fairness, we should have a look at this again to ensure certain people are not overly penalised.

The Taoiseach: Information on Leo Varadkar Zoom on Leo Varadkar I can certainly understand what the Deputy is saying. I can imagine a scenario in which two sisters or brothers are living in the one house when one passes on and the other is left with a significant tax bill, which he or she may be unable to pay, in particular if he or she is elderly. I understand the issues the Deputy raises or which could arise and they merit examination. It is not something I have discussed with the Minister for Finance but I will on foot of the Deputy raising it. However, we must be careful to get these things right. As we so often learn when it comes to tax law, one can fix one anomaly only to open up another one. One can close one loophole but thereby inadvertently open a new one. When one does these things, one has to be able to write them in law in a way that stands up in the courts and when the Revenue Commissioners seek to enforce them.

Death of Former Member: Expressions of Sympathy

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl In accordance with the order of the House of yesterday, we will hear expressions of sympathy on the death of Mr. Peter Kelly, a former Fianna Fáil Deputy for the constituency of Longford-Westmeath. To that end, it is important to extend a warm welcome to Maura Kelly, Peter's wife, his daughter, Emily, his son, Peter Jnr., and his brother, Vincent, who are with us for these tributes. I ask Members to keep their remarks to approximately two minutes.

It was a great honour and privilege to have served in the House with Peter. I got to know him on a mission to Brussels many years before either of us came to serve here. It became very clear very early that Peter had three outstanding characteristics. First was devotion to family. Maura was rarely far from his side and she was mentioned in every conversation one had with him. His devotion to his children and his extended family was obvious. The second characteristic was commitment. He had total commitment to the service of the people of Longford and of the country as a whole. Third was loyalty to the Fianna Fáil Party, of which he was a lifelong member. He was a man of integrity and he had vision. He was hard-working and, I can tell the House, he was really great company.

The Taoiseach: Information on Leo Varadkar Zoom on Leo Varadkar I gcás Peter Kelly, ceiliúraimid dea-bheatha duine a d’oibrigh ar mhaithe leis an saol. Bhí grá mór aige do phobal a cheantair féin. Bhí grá aige do dhaoine i gcoitinne agus bhí sé an-tugtha don pholaitíocht. Bhí clú agus cáil air ar fheabhas a dhúthrachta agus de bharr gur oibrigh sé go dian dícheallach ar son mhuintir Longfoirt thar na blianta fada. Fear mór teaglaigh ab ea é, a raibh pearsantacht bheoga, mheanmnach aige. D’fhág a bhás easnamh orainn.

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