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The Key Highlights from Budget 2015 (Ireland)

Income Tax

- The top rate of income tax will be reduced from 41% to 40%.

- The income tax standard rate band will be increased by €1,000 to €33,800 for single persons and to €42,800 for married one income couples.

- Income tax relief will be available at the standard rate in respect of water charges up to a maximum of €500 per household per year.

- First Time Buyers’ will be able to save for their first home and retain 100% of the interest that they earn on their savings.

- The Home Renovation Initiative (HRI) will be extended to rental properties whose owners are liable to income tax.

- The 80% windfall tax applying to chargeable gains on the disposal of development land will be abolished from January 2015

- Changes to the Universal Social Charge (USC) are as follows: 1. The entry point to the Universal Social Charge (USC) will be increased to just above €12,000. 2. The 2% USC rate will be reduced to 1.5%. 3. The 4% USC rate will be reduced to 3.5%. 4. A new 8% Universal Social Charge rate will be introduced for incomes in excess of €70,000. 5. A new 11% Universal Social Charge rate for self-employed income in excess of €100,000. 6. The exemptions from the top rate of USC for medical card holders earning less than €60,000 will be retained.

Corporation Tax

- The 12½ corporation tax rate is “settled policy” and will not change.

- The 3 year corporation tax relief (on trading income and certain capital gains) for Start Up Companies is being extended to new business start ups in 2015.

- The “Double Irish” tax rule is to be phased out – a company resident in Ireland must also be tax resident in Ireland – applies to new companies from January and transitional arrangements will apply to existing companies until 2020.


- The 9% Vat rate on tourism related activities is being retained.

- The price of 20 cigarettes will increase by 40 cents from midnight on 15th October 2014.

- No change to Alcohol, Petrol Diesel, Motor Tax or to Vehicle Registration Tax.

- No Cuts to Social Welfare Schemes.

- 25% Christmas Bonus to be paid to Social Welfare Recipients this year.

- An Increase in the Child Benefit allowance by €5 per Child from January 2015 and by a further €5 in January 2016.

- An Increase in the Elderly Living Alone allowance to €9 per week.

- 2015 will signal a resumption of recruitment into the civil service.

- The Government has announced a number of tax measures to support young farmers across Ireland.

- The Employment & Investment Incentive (EII) will be amended to raise company limits, increase the holding period by 1 year and include medium-sized companies in non-assisted areas and internationally traded financial services. These measures are subject to approval from the European Commission. Hotels, Guest Houses and Self-Catering Accommodation will remain eligible for a further 3 years and the operating and managing of nursing homes will be included for 3 years.

I hope you find this briefing useful and if you have any questions, do feel free to contact me.

Timothy Kelliher Chartered Accountant

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