A collective move by Fianna Fail members last night to remedy "defects" in the capital gains and inheritance taxes appeared to signal a significant change in next week's Budget.
Mr Michael Finneran, Fianna Fail spokesman on finance, said the current thresholds on inheritance tax no longer reflected economic reality. On its introduction in 1976, the exemptions threshold for gifts and inheritances from parent to child was £150,000. Unfortunately, provision to index this threshold for inflation had not been made until 1990.
The current index exemption threshold from parent to child was £192,000. Effectively, it had risen by 28.6 per cent between 1976 and 1999. However, house prices had increased between 1976 and 1998 by 1,047 per cent in Dublin and the cost of new houses throughout the State had gone up by 805 per cent. Second-hand houses in Dublin had risen by 1,113 per cent and second-hand houses nationally by 879 per cent.
If the parent-child exemption threshold had been indexed annually from the inception of capital acquisition tax, the annual exemption this year would be £932,950. A large number of taxpayers, especially those in the larger urban areas, were extremely anxious about the likely liability to the tax that would arise on the passing-on of their family home.
He proposed that thresholds should be raised to 1999 values and thereafter be indexed as at present. Echoing concerns raised last week by Leas-Cathaoirleach Mr Liam Cosgrave (FG), Mr Finneran said that many owner-managers were facing difficulty in handing on the family business because of the £250,000 capital gains tax threshold on its value. He called on the Minister to raise the threshold to £500,000.
Tributes were paid to Mr Micheal Cranitch, a senator from 1969 to 1973 and from 1977 to 1982, who died at his Co Cork home last Tuesday.
Mr Cranitch, who was Cathaoirleach of the House 26 years ago, was described by the present leader of the Seanad, Mr Donie Cassidy, as "a great and proud Irishman who spoke Irish as his first language and who never lost an opportunity to promote his native tongue."