Budget 2015: The Key Tax Measures

October 14, 2014

The main tax measures of Minister Noonan’s Budget 2015 Speech, announced this afternoon, are as follows:

Budget 2015

Corporate Taxes

The 12.5% Corporation Tax rate remains unchanged.

The R&D Tax Credit base year provisions will be phased out.

The 3 year Corporation Tax exemption for start-ups is to be extended.

A new “Knowledge Development Box” will be introduced to attract new inward investment.

The “Double Irish” tax loophole is to be eliminated. All Irish-registered trading companies must also be tax-resident here. This will apply with immediate effect for new companies and will be phased in for existing companies.

Farming

To encourage long term leasing of land, the income tax threshold for land leasing is to be extended by 50%.

The CGT retirement relief on farm land is to be extended.

The existing CAT relief on agri land is being restricted to actively farmed land.

Stamp duty is being scrapped on long term land leasing.

The stamp duty relief for farm transfers within families is being extended.

The range of farmers’ Income Averaging is extended from 3 to 5 years.

Income Averaging is also being extended to farmers with diversified farm income.

The farmers’ flat rate VAT addition is up from 5% to 5.5%.

Tourism

The 9% VAT rate for tourism enterprises is being retained.

Pension Levy

The 0.6% pension levy is being scrapped at the end of 2014.

Property Market

The Home Renovation Incentive has attracted €190m worth of work so far.  It is being extended to rental properties whose owners are registered for income tax. This comes in with immediate effect.

The 7 year CGT exemption is being abolished.

A refund of DIRT tax will apply to first time buyers who use their savings to buy their first home.

The existing 80% windfall tax is being abolished.

Water Charges

Income Tax relief at the standard 20% rate will apply to water charges paid by householders.

SME Sector

The Foreign Earnings Deduction is being widened and extended to a range of new countries.

Income Tax

Today’s budget is intended to form the first stage in a 3-year programme of income tax reform and reductions.

The USC entry point will be increased to approx €12,000 and the other USC bands will be increased accordingly.

The 2% USC rate is being cut to 1.5%

The 4% USC rate is being cut to 3.5%

The 41% Income Tax rate is being cut t0 40%.

The standard rate (20%) tax band is being increased by €1,000 per annum.

A new USC rate of 8% for income in excess of €70,000.

A new USC rate of 11% for self-employment income in excess of €100,000.

Excise Duty

Microbreweries will enjoy an increase an the annual excise exemption ceiling. The existing relief for microbreweries was originally introduced in 2005 by Brian Cowen as Minister for Finance.

The price of 20 cigarettes will increase by 40 cents, with a corresponding increase in other tobacco products.

No rise in taxes on alcohol, petrol, diesel or VRT.


Stamp Duty: Good News for Forestry & Farm Owners

January 21, 2013

A recent Appeal Commissioners case has forced Revenue to extend the Stamp Duty exemption on commercial forestry and woodlands.

Up to now, the sale or lease of a commercial woodland property has enjoyed a partial exemption from Stamp Duty. Growing trees, managed commercially, were exempt from Stamp Duty sale or lease transactions, but this exemption did not apply to gifts of such properties.

Today’s Revenue eBrief confirms that the exemption will now apply to gifts of commercial woodlands.

Stamp Duty Exemption on Commercial Woodland

You should note that the exemption only applies to growing trees within a commercial forestry plantation, and not to the value of the underlying land.

For example, where a semi-mature mixed plantation is valued at €4,000 per acre, comprising a land value of €1,000 per acre, and trees at €3,000 per acre, Stamp Duty will only be charged on the land value of €1,000, and not on the much higher value of the growing trees.

Incidentally, the eBrief also confirms that the existing Stamp Duty relief on farm land transfers to “Young Trained Farmers“, which was due to expire on 31 December 2012, is being extended into 2013, pending the enactment of the 2013 Finance Act.

This is in line with a commitment given by Finance Minister Michael Noonan in his Budget 2013 speech last month.



Budget 2011 – Stamp Duty on Residential property

December 7, 2010

The 2011 Budget includes major changes to Stamp Duty on residential property transactions.

Budget 2011 Cuts - Brian Lenihan Minister for FinanceThe main change is the introduction of a new flat rate of 1% for transfers of residential property to 1% on properties valued up to €1 million, and a 2% rate on properties valued over €1 million.

The following Stamp Duty reliefs and exemptions are abolished.

  • First time buyer relief
  • Exemption for new houses under 125 sq m in size
  • Relief on new houses over 125 sq m in size
  • Consanguinity relief from for residential property transfers between close relatives.
  • Exemption for residential property transfers valued under €127,000
  • Stamp Duty ‘site to child’ relief

 

The changes apply for contracts executed on or after 8 December 2010. Transitional measures will apply to contracts currently in progress that are completed by 30 June 2011.