Tax reductions announced in Budget 2017
There was some good news in Budget 2017 with the announcement of reductions in the rate of capital gains tax for entrepreneurs, a reduction in some of the USC rates and a gradual reduction in the deposit interest retention tax.
Increases in the tax free amount that you can inherit or receive as a gift have also been announced in relation to capital acquisition tax.
Link to Department of Finance Summary of Changes.
Universal Social Charge – USC
Some USC rates have been reduced by 0.5% and the band increased to €18,772 for income taxed now at 2.5%
€0 to €12,012 @ 0.5%
€12,013 to €18,772 @ 2.5%
€18,773 to €70,044 @ 5%
Capital Acquisition Tax – CAT
The lifetime tax free amounts are being increased:
"The Group A lifetime tax-free threshold applying to gifts and inheritances from parents to children is being raised from €280,000 to €310,000,
The Group B lifetime tax-free threshold applying to gifts and inheritances made to parents, siblings, nieces, nephews or grandchildren is being raised from €30,150 to €32,500.
The Group C lifetime tax-free threshold applying to gifts and inheritances made to all others (except spouses and civil partners who are exempt) is being raised from €15,075 to €16,250."
Capital Gains Tax – CGT
The capital gains tax rate for entrepreneurial relief is being reduced to 10% on gains of up to €1 million (a reduction from the current 20% rate).
Deposit Interest Retention Tax – DIRT
A gradual reduction in the rate of DIRT, a tax on savings has been announced starting with an initial 2% reduction (reducing DIRT to 39%) with a 2% reduction each year so that the DIRT rate will be 33% in 2020.
Earned Income Tax Credit
The earned income tax credit for the self employed has been increased by €400 so that the earned income tax credit for 2017 will be €950.
Please contact us to discuss your taxation requirements.
Disclaimer
The material in this article is for general information purposes only and does not constitute legal or taxation advice. Specific legal and taxation advice should be sought before acting. All information and taxation rules are subject to change without notice.
No liability whatsoever is accepted by M. McLoughlin & Co. for any action taken or not taken in reliance on the information in this article