As a tax law it was badly drafted, rushed in without published guideliness, and, most cruelly of all, retrospective in action. It consigned thousands of families to stressful uncertainty and then forced many of them to break up family living arrangements.

A lot of elderly people find themselves living in the old family home when their children with young families are struggling to find the deposit to buy a big enough house. What could make better sense that to all live together and share resources, not least as it brings the elderly built-in care, company and support?

The problem is that tax law states that granny cannot give her house to her children and carry on living there with them. Either the gift is deemed invalid because she has 'reserved a benefit' and her children will have to pay 40% tax on the value of the house when she dies, which usually means they have to sell it thereby negating the whole point of moving in to it. Or, under Pre-Owned Asset Tax, granny has to pay an annual tax based on the market rent of the proportion of the property she occupies.

Pre-Owned Asset Tax particularly targets those elderly people who used a deferred lease method whereby they gave their house to their children but retained a lease to continue living in a part of the house until their death. They did this so that their children would not have to pay 40% tax on the value of the house at their death (after all the house you live in – your principle private residence – is meant to be free of tax) knowing that this would probably force them to sell the house.

The Revenue publicly acknowledged that such lease arrangements made before February 2001 were valid, but then they introduced Pre-Owned Asset Tax which operates retrospectively forcing granny or grandad to make annual tax payments based on the market rental value, a sum far beyond the means of most old aged pensioners.

The end result of this tax is that some elderly people have had endure great financial hardship to pay the tax, but most have been unable to pay and so have had to leave their own houses and be parted from their families and the care and support that living together brings.