Clare councillor demands reform of inheritance laws that ‘penalise those without children’

Concerns have been raised over Ireland’s inheritance laws, which some say "penalise those without children."

Calls to reform inheritance laws deemed unfair to those without children were raised by Fine Gael councillor Mary Howard at the October meeting of Clare County Council.

Cllr Howard proposed the motion that "Clare County Council request both Minister for Finance, Mr. Pascal Donohue and Minister for  Equality Ms. Norma Foley address the current legal anomaly regarding inheritance laws for those  without children."

She continued: "Over one million Irish citizens are childless, the current inheritance laws are  inequitable and discriminatory and are skewed against childless people, with prohibitive tax  obligations."

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She called on the government to review the current legislation which must must "reflect the Ireland of now so that people are not punished for how they value family."

Cllr Howard explained that the Capital Acquisitions Tax has become a problem for people inheriting from individuals who have no children and choose to leave their estates to others. 

The Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances. People can receive a certain amount tax-free, depending on their relationship to the person giving the gift or inheritance. Certain types of inheritances and gifts are also exempt. 

Cllr Howard argued this current tax structure is unfair to those without children, as they often face higher rates when leaving assets to relatives or friends. She called for higher CAT thresholds to make it easier for people to pass on inheritances to their "chosen heirs".

One councillor spoke in favour of the motion, saying: “We’re not talking about fat cats, we’re talking about people in need.” 

It was widely agreed in the chamber that it is unfair that people have to sell inherited homes to pay Capital Acquisitions Tax on the property.

Councillors also expressed concern that the inheritance tax threshold for those leaving assets to their children, set at €335,000, is below the average house price of €375,000 — one of the most commonly inherited assets.

Sinn Fein councillor Tommy Guilfoyle seconded the motion saying: "It's not about people making money, it's people trying to keep a roof over their head."

He added: "The tax policies are unbalanced and incorrect and needs to be changed.