Here is an interactive income calculator graph using finance.gov.ie data which we have embedded below which also featured on the Irish Times Budget section.
The 12.5% tax rate remains. The rate is ‘settled policy, it will not change’
The three year corporation tax relief for start-up companies will be extended to 2015 as will the accelerated capital allowances scheme for energy efficient equipment for a further three years.
The Research and Development credit will be altered to remove the base year of 2003 from 1 January 2015. The 25% tax credit applied to the amount of qualifying R&D expenditure incurred by a company in a given year that is in excess of the amount spent in 2003.
Residency rules will be changed to ensure all companies registered in Ireland will be treated as tax resident in Ireland.
Changes to the agricultural sector include;
- There will be no milk quotas from 2015;
- increasing the income tax exempt thresholds by 50% and introducing a new threshold for leases of 15 years and over;
- allowing relief where the lessee is a company;
- removing the current 40 years of age threshold for leasing relief;
- targeting CAT relief for agricultural property to ensure it is used by active farmers;
- broadening CGT retirement relief so that, for example, individuals can now lease out their land for up to 25 years prior to disposal and still be eligible for CGT retirement relief;
- extending CGT retirement relief to land let under conacre, which is disposed of, or converted to long term leasing before the end of 2016;
- extending stamp duty relief for non-residential land transfers between certain close relatives;
- removing stamp duty on agricultural leases in excess of 5 years; and
- extending CGT farm restructuring relief to the end of 2016 and broadening it to allow for restructuring through whole farm replacement;
- Increase of income averaging from 3 to 5 years and allowing income averaging on farm income who derive income from another trade or profession
- Farmers Flat Rate increase from 5% to 5.2% (for farmers not registered for VAT)
Tourism and Hospitality
The 9% VAT rate will be retained for tourism services
The 0.6% pension levy will end at the end of 2014 and the additional .15% pension levy will end at the end of 2015
Home Renovation scheme is to be extended to the Rental sector. This is where 13.5% of the cost of refurbishment of properties can be claimed back in tax. This is allowable until the end of 2015. This was part of my pre budget submission to government as a tax adviser and committee member of the Residential Landlords Association of Ireland.
A new relief to be introduced in relation to existing pre-1914 buildings by transforming them into modern homes will allow home owners to offset the entire cost of renovation of such properties against their income tax over a ten year period.
The end will come to the 7 year Capital Gains Tax relief for purchasing property after December 2014. This was anticipated.
The 80% windfall tax will be removed which applied to gains made on the disposal of development land. The CTGT reverts back to 33% similar to any other properties. This means ‘Investors’ can buy up the land that if subsequently rezoned as development land tax will be 33% rather than 80%.
First Time buyers can save up to 20% of their mortgage without the deduction of DIRT (41%).
Rent a Room Relief is being increased from €10,000 to €12,000 per year – This allows you to rent rooms in your principal home up to €12,000 Tax Free
Individuals can avail of a tax credit of 20% of the cost of water charges up to the value of €100 (i.e. 20% of charges up to €500). The credit will be claimed in the year after the charge.
Universal Social Charge (USC)
The Following changes will be introduced from 2015:
- Increasing the entry point to the Universal Social Charge to just above €12,000
- Increasing the entry point to the second rate of USC from just over €10,000 to just above €12,000 and the upper ceiling for this band is increasing from just over €16,000 to just above the level of the minimum wage;
- Reducing the 2% USC rate to 1.5%
- Reducing the 4% USC rate to 3.5%
This will save less than €200 per annum for an individual earner.
The Following changes will be introduced from 2015:
- Increasing the Income Tax Standard Rate band by €1,000 to €33,800 for single individuals;
- Reducing the top rate of Income Tax from 41% to 40%;
- Introducing a new 8% USC rate for incomes in excess of €70,000 and an 11% rate of
- USC for self-employed income in excess of €100,000 to limit the benefits of these changes for the top 10% of earners; and
- Retaining the exemption from the top rate of USC for medical card holders earning less than €60,000 and these individuals will now only be liable to a maximum USC rate of 3.5%. This rate of USC is also the maximum that will apply to the over-70s who have incomes lower than €60,000.
Meaning…..For those self-employed or PAYE workers earning between €33,800 and €70,000, budget 2015 will save you somewhere between €390 and €760 in taxes in 2015. Earners of €32,800 will save less than €200 in income taxes in 2015.
An increase of 40c on a pack of 20 cigarettes from 15/10/14 – increasing the pack to €10. A similar increase will apply to tobacco – 20c per 25gram pack.
Artists exemption is being increased from €10,000 to €50,000