Time-dependent density-functional methods using present-day exchange-correlation functionals lead to incorrect results for electronic excitations in systems with non-overlapping entities even if there is no net charge-transfer accompanying the excitations. An analysis shows that this problem is caused by shortcomings in the presently available exchange-correlation kernels. As an example, a symmetric ethene dimer model system is considered, and it is demonstrated that the problem leads to artificially low excitation energies not present in an isolated ethene molecule. The problem reported is related to the well-known charge-transfer problem of time-dependent density functional theory, although in the present case no net charge-transfer occurs. (c) 2005 Elsevier B.V. All rights reserved.