Barra Roantree "Was the Budget for the children of the rich or the children of the poor"

Brendan Burgess

Brendan Burgess

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Barra Roantree: Does the Government want to help the country’s poorest children, or the richest?

Budget 2025: Spending the same amount cutting inheritance tax as went to permanent payments targeted at the poorest children was an odd choice
www.irishtimes.com www.irishtimes.com

An excellent summary of the government's priorities.

Among the other tax cuts announced was an increase in the lifetime thresholds above which Capital Acquisitions Tax applies on gifts or inheritances. The Minister for Finance justified this €90 million tax cut – which benefits a tiny fraction of the population – on the basis these thresholds were last increased in 2019, since when property prices have grown.

Yet despite an impressive sounding €12 per week cash rise in most social welfare payments from January, these will remain below their 2020 level in real terms (adjusted for inflation). In other words, despite five years of strong economic growth, the core rates of social welfare payments will not even have kept pace with price increases over the course of this Government.
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For example, another two rounds of €125 energy credits will land in the door of every household before Christmas regardless of their bank balance, as will two extra months of child benefit for those with children. These temporary payments will all inevitably have to be withdrawn by the next Government. And when they are, there will be consequences for incomes at the bottom of the distribution.

This is particularly concerning given we have already seen progress on reducing income inequality and poverty stall, particularly for children.

Recent ESRI research in partnership with Community Foundation Ireland showed that material deprivation – the share of individuals in households unable to afford two or more items from a list of ten essentials – rose sharply from 17.7 per cent in 2022 to 20.1 per cent in 2023 for children.
 
My answer to Roantree's hypothetical question (which is also the title of this thread) is: NEITHER .... or BOTH.

Seems to me that he has cherry picked two small elements from a massive and wide-ranging budget in order to pursue whatever particular agenda he and his fellow left-leaning budgetary analysts are promoting this week. Next week, they'll probably be giving out about the "children of the rich" (sic) getting free schoolbooks, lunches, university fees or somesuch.
 
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I don't agree with increasing inheritance tax thresholds on the basis of rising property prices.

If you live in the property, or it's your (only) family home, you can avail of dwelling home relief and keep it tax free which is fair enough.
 
Brendan Burgess said:
I have heard him present papers at the Dublin Economics Workshop and other places and he is an excellent researcher and presenter.

By all means question his data. By all means differ with his conclusions.

But don't try to win your argument by claiming that he is a friend of Paul Murphy.
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Not quite sure what led to you imagine that I was trying to win an argument, Brendan.

I was simply making an observation on an Irish Times article that I regarded as jejeune and more than a little simplistic. Most of us - including you, I would imagine - are well aware that budgets in the round are a lot more nuanced than Rountree's portrayal of them in that article.

I have now edited my comment to remove that disgraceful smear on Mr. Rountree's impeccable reputation.
 
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Marsupial said:
Most of us - including you, I would imagine - are well aware that budgets in the round are a lot more nuanced than Rountree's portrayal of them.
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Where are you seeing the nuance?

It gave money to everyone, whether they needed it or not.

It continues to run an underlying deficit when you strip out the windfalls.

Successive budgets have added to the cost of living.

Barra's piece was an opinion piece and not the detailed analysis you would expect from the ESRI, IFAC or the Central Bank.

Brendan
 
Calico said:
I don't agree with increasing inheritance tax thresholds on the basis of rising property prices.

If you live in the property, or it's your (only) family home, you can avail of dwelling home relief and keep it tax free which is fair enough.
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Perhaps not following house prices but surly it makes sense that a value follows inflation to some degree.

I find the tax fee if living in it situation a bit unfair on say the person who has moved out as they need some freedom / be closer to work etc but are paying rent at an unsustainable level.

I wonder is it abused a bit where people are casually renting but say they haven’t officially moved out.

It’s a different story if the person has gone on and bought a family home if their own.
 
Marsupial said:
Most of us - including you, I would imagine - are well aware that budgets in the round are a lot more nuanced than Rountree's portrayal of them in that article.
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Roantree’s article was the most nuanced I’ve read of all the media commentary.

My only quibble is that he doesn’t focus more on the lack of large public infrastructure spending.
 
faketales said:
Perhaps not following house prices but surly it makes sense that a value follows inflation to some degree.

I find the tax fee if living in it situation a bit unfair on say the person who has moved out as they need some freedom / be closer to work etc but are paying rent at an unsustainable level.

I wonder is it abused a bit where people are casually renting but say they haven’t officially moved out.

It’s a different story if the person has gone on and bought a family home if their own.
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The qualifying criteria for dwelling home relief are set out below:

Qualifying conditions for inheritance on, or after, 25 December 2016​

You will be exempt from Capital Acquisitions Tax (CAT) on the inheritance of a dwelling house if:
  • the house was the only, or main, home of the disponer at the date of their death. This condition does not apply if you are a dependent relative.
  • you lived in the house as your only, or main, home for the three years immediately before the date of the inheritance
  • you do not own, or have an interest in, any other house at the date of the inheritance
  • you do not acquire an interest in any other house from the same disponer between the date of the inheritance and the valuation date
  • the house continues to be your only, or main, home for six years after the date of the inheritance. This does not apply if you:
    • are aged 65 years or over at the date of the inheritance
    • are required by reason of employment to live elsewhere
    • or
    • are required to live elsewhere because of mental or physical infirmity, and this is certified by a doctor.

Qualifying conditions for inheritance on, or after, 25 December 2016

This page provides information regarding the inheritance of a dwelling house on, or after, 25 December 2016
www.revenue.ie www.revenue.ie

I am not sure if you can rent an apartment but still meet the "living in the house as your only, or main, home for the three years immediately before the date of the inheritance". I guess probably not. If so I think this should be changed. For example, think of someone in their twenties who is renting independently but whose parents pass away. Or any adult children for that matter. If you don't have a home, you should be allowed to inherit one once tax-free imo.
 
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