A new tax relief has been introduced to ease the burden on relatives inheriting a house in which they live. Principal Private Residence Relief will apply to inheritances taken up on or after Budget Day by beneficiaries such as nieces, nephews, brothers and sisters.
Spouses are already exempt from tax, while the threshold applying to children inheriting the family home from a parent is already set at a sufficiently high level of £185,550 for the calendar year of 1997, the Minister believes. The new tax relief will reduce the value of a house for inheritance tax purposes by 80 per cent or £150,000, whichever is the lesser amount, providing the recipient is a close relative of the deceased and both have lived in the house for at least 10 continuous years immediately before the inheritance.
The terms of the relief also stipulate that the recipient must not own any other house or part of another house to qualify.
Mr McCreevy said the introduction of the new relief will cost the Exchequer £200,000 in 1998.
