A proposal to increase inheritance has been labelled “nonsensical” by a Fine Gael TD. 

The Government’s Commission on Taxation and Welfare is due to be published on Wednesday and is set to recommend a "substantial" reduction in the amount of money people can inherit tax-free.

At present, an individual can inherit €335,000 from their parents before they have to pay tax at 33%.

For many people the so-called ‘Bank of Mum and Dad’ is the only way they can ever hope to own their own home and Neale Richmond, Fine Gael TD for Dublin Rathdown, says the threshold should not be lowered or the rate of tax increased.

“This is taking money out of people’s pockets,” he protested to The Hard Shoulder. 

“This is looking to increase a tax on a property - most likely a family home - that people have most likely already paid tax on multiple times. 

“They paid stamp duty, they’ve serviced the mortgage, they’ve paid the local property tax and they are still paying a large amount of [inheritance] tax at 33% over €330.” 

He added that there other ways in which the Department of Finance should look to raise revenue: 

“Last year we took €16 million into the exchequer from cash seized from criminals; that should be the focus, not taxing people on an asset that has already had multiple taxes paid already,” he continued.

“We already have the third highest inheritance tax rate in the EU, the seventh highest in the OECD. We already tax it quite a bit; the idea of lowering the threshold and increasing the tax in these difficult times is absolutely nonsensical.”

A general view of construction work on an affordable housing scheme in Dublin. Picture by: PA Images/Alamy

However, Colette Bennett from Social Justice Ireland believes that increasing the tax is an issue of “fairness”. 

“Tax is what pays for goods and services that we desperately need - including affordable housing,” she argued. 

Adding that “prices have become so inflated because we haven’t been investing in affordable rental and social housing.

“So rather than looking at it as taking money away from people, this is an investment that Government needs to make in order to give people the goods and services that actually improve their standard of living.”

Main image: Neale Richmond