Budget 2015: Highlights

The highlights of the 2015 Budget are as follows: 

INCOME TAX

  • The top rate of tax has been reduced from 41% to 40%
  • Tax Bands have been increased, so the first €33,800 is at 20% for a single person (€42,800 for a married couple), balance of income at the new rate of 40%
  • Annual tax relief for water charges, at 20% of the previous years charges, up to a maximum of €100 (€500 charges @ 20%)
  • No other changes to tax credits other than the water charges relief
  • Exemption for income under the rent a room scheme increased from €10,000 to €12,000
  • New relief from DIRT on savings by first time buyers towards the deposit on a home (from 15th October 2014 to 31 December 2017). Relief is limited to 20% of the consideration paid and is based on DIRT paid in the 48 months prior to purchase.
  • Home Renovation Incentive Scheme to be extended to landlords
  • Employment Incentive Scheme limit increased to €5m pa, with a lifetime limit of €15m
  • The artists exemption has been increased from €40,000 to €50,00 pa
  • The upper limit of €500,000 has been removed from the Special Assignee Relief Scheme (and only Irish Residency is required)
  • The Seed Capital Scheme will now be called the Start up Relief for Entrepreneurs (SURE) and is extended to people unemployed for for up to two years
  • Foreign Earnings Deduction has been extended to 2017 and the list of relevant countries has been extended

UNIVERSAL SOCIAL CHARGE

  • Exemption from USC is extended to individuals with income less than €12,012 (increased from €10,036)
  • The bands have been increased with the lowest rate applying to income up to €12,012, 2nd rate on income from €12,012.01 to €17,576, 3rd rate on income from €17576.01 to €70,044, and new 4th rate applying to income over €70,044
  • The first two rates have been reduced to 1.5% (from 2%) and 3.5% (from 4%), the 3rd rate remains unchanged at 7% and a new 8% rate on income over €70,044 has been introduced
  • Self employed individuals will pay 11% on income over €100,000
  • Individuals over 70, or under 70 who hold a full medical card (and whose income is less than €60,000 pa) will pay 1.5% on income up to €12,012 and 3.5% on income over €12,012

PRSI

  • No Changes to PRSI

 

PENSION LEVY

 

  • .6% rates ends in 2014, additional .15% levy ends in 2015

EXCISES

  • No changes to alcohol rates
  • Relief for microbreweries extended to those who produce less than 30,000 hectolitres pa
  • Increase of 40 cents on 20 cigarettes
  • No changes to VRT
  • Extension of VRT relief for Electric, Plug in and Hybrid vehicles and motorbikes until 31 December 2016

VAT

  • Retention of the 9% reduced rate for Tourism related services

CORPORATION TAX

  • Retention  of the 12.5% corporation tax rate
  • All companies incorporated in Ireland will be tax resident here unless regarded as resident elsewhere for the purposes of a tax treaty
  • 2003 base year restriction removed from the R&D tax credit scheme
  • 3 year relief for start up companies extended to start ups in 2015
  • 80% restriction on aggregate allowances for certain intangible assets has been removed
  • Accelerated capital allowances for energy efficient equipment extended until the end of 2017
  • Plans to introduce a Knowledge Development Box in next years budget

CAPITAL GAINS TAX

  • Windfall gain tax rate of 80% on gains as a result of certain planning decisions will be abolished from 1 January 2015, and the normal rate of 33% will apply
  • CGT relief in respect of the first 7 years of ownership for properties purchased between 7 December 2011 and 31 December 2014 will not be extended beyond 31 December 2014

 

 

Date Added: 15 Oct 2014

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