Budget 2015 & Finance Bill Update TheFinanceBill2014toimplementtheBudgetof14thOctober2014hasbeenpublished.ThisUpdate summarisestheknownchangesfor2015,asat24thOctober2014. Income Tax 2015 TaxRates StandardRateBand Single Standardrate band Balance TaxRate Married 20% Standardrate band 40% Balance Single/widowed/surviving civilpartnerwithout dependantchildren Oneparentfamily Married/civilpartners, oneearner Married/civilpartners, twoearners Band €33,800 €37,800 €42,800 €42,800 + increase max €24,800* *Theincreaseisthelowerof€24,800andtheincomeof the spouse/civil partner with the lower income. The increase is not transferable between spouse/civil partners. USC 2015 Total income subjecttoUSC Thefirst€12,012 Thenext€5,564 Thenext€52,468 Balance USCrate 1.5% 3.5% 7% 8% However: x individualswhosetotalincomesubjecttoUSCfortheyearislessthan€12,012areexempt fromUSC; x thefollowingpay3.5%onallincomeover€12,012: x o individualsoverage70whosetotalincomesubjecttoUSCfortheyearis€60,000or less. o individualsunderage70whoholdafullmedicalcardandwhosetotalincomesubject toUSCfortheyearis€60,000orless. a3%additionalUSCrate(i.e.ontopofthestandard8%rate)appliestononPAYEincomein excessof€100,000. DIRT & Exit Tax x Nochangefor2015inthe41%DIRTandexittaxrates. x ADIRTrefundschemehasbeenintroducedforthosewhobuytheirfirsthomebetween14th October2014and31stDecember2017. Preparedby:TechnicalGuidanceLtd. Page1of3 24thOctober2014 Budget 2015 & Finance Bill Update SuchindividualscanreclaimanyDIRTdeductedfromdepositsduringthelast48monthperiod endingonthedateofpurchaseoftheirfirsthome. Thereisalimitonthetotaldepositswhichcanqualifyforthisof20%ofthepurchasepriceof theproperty,butitwouldseemthatinthecaseofjointpurchaserseachhasaseparate20% purchasepricelimitontheamountofdepositswhichcanqualifyforthisrefund. ARFs, AMRFs, & vested PRSAs 2015 x Theimputeddistribution rateof5%applyingtoARFsandvestedPRSAswillbereducedin 2015to4%forthoseunderage71throughoutthewholeyearandwhohavetotalARFsand vestedPRSAsoflessthan€2m. Thereforetheimputeddistributionratesapplyingin2015willbe: Agethroughout2015 <61 61to70 71andover TotalARF&vestedPRSA fundsis€2morless Nil 4% 5% TotalARF&vestedPRSA fundsgreaterthn€2m Nil 6% 6% ExistingARFandvestedPRSAholdersunderage71whoaredrawingdownat5%pacaneither keepthisrateofdrawdownordropdowntothenewlowerminimumof4%pa. x AMRFholderswillbeablein2015andbeyondtowithdrawupto4%paofthevalueoftheir AMRFat1stFebruaryinthatyear;anywithdrawalwillbesubjecttoPAYE.AMRFholdersare notobligedtomakeawithdrawal;theywillhaveanoptionorchoicetomakeawithdrawal upto4%pa,max. Example AoifehasanAMRFvaluedat€68,000on1stFebruary2015.Shecanwithdrawupto€2,720in totalfromherAMRFin2015,subjecttoPAYE. Shedoesn’thavetomakethiswithdrawalfromherAMRFifshedoesn’twantto.It’sanoption forher. AMRFclientswithsignificantaccumulatedgainsintheirAMRFwhomaywanttoaccesssuch gains in the short run may consider withdrawing such gains (subject to PAYE) before 31st December2014becauseafterthatdatethemaximumtheycanwithdrawis4%paofthevalue oftheirAMRF,whichcouldbealotlessthantheircurrentaccumulatedgains. Chargeable Excess Tax 2015 x Thechargeableexcesstaxrateisbeingamendedfromitscurrentfixed41%ratetothehigher rateofincometaxfor2015andonwards. Thismeansareductionto40%in2015andiftheGovernmentreduce,astheyhaveindicated, thehigherrateofincometaxin2016to39%,thechargeableexcesstaxratewillalsoreduce to39%in2016. x Whereanindividual,whohashadaPensionAdjustmentOrdermadeovertheirretirement benefits,takeshisorherbenefitsandachargeableexcesstaxliabilityarises,thetaxliability Preparedby:TechnicalGuidanceLtd. Page2of3 24thOctober2014 Budget 2015 & Finance Bill Update willnowbesharedbetweentheindividualandthebeneficiaryofthePAO(usuallyhisorher exspouse),inthesameproportionasthePAOsplitsthebenefits. Uptonow,thefullchargeableexcesstaxliabilityrestedwiththeindividualandthebeneficiary ofthePAOhadnochargeableexcesstaxliability,eventhoughthebeneficiaryofthePAOhas ashareoftheretirementbenefits. Employment & Investment Incentive (EII) Scheme ThiswasformerlytheBESscheme. Twochangestothisschemefor2015: x Themaximuminvestorholdperiodtoretainthebenefitofthetaxreliefsisbeingincreased from3yearsto4years. x Themaximumtaxreliefisbeingreducedinlinewiththehigherrateofincometax,i.e.: o 30%atthetimeofinvestment,and o 10%after3years,ifthecompanymeetscertainconditionsinrelationtoemployment growth,etc. Capital Gains Tax and Capital Acquisitions Tax x Nochangeintaxratesorthresholdsfor2015. x Agriculturalrelief(whichreducesthevalueby90%forCATpurposesofcertainagricultural assets)isbeingrestrictedto‘active’farmersorwholeaseagriculturalpropertyonalongterm basistoactivefarmers. State Savings Revenue reporting x Currently life assurance companies and banks have to make automatic returns of investor paymentstotheRevenueeachyear. x UptonowthisreportingrequirementdidnotapplytotheNTMA/PostOfficeinrespectof investors in State Savings products such as Savings Bonds, Savings Certificates, Post Office savingsaccounts,PrizeBonds,etc.TheRevenuereportingrequirementisnowbeingextended toallStateSavingsproducts. Preparedby:TechnicalGuidanceLtd. Page3of3 24thOctober2014
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