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

PENSION LEVY

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

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