PENSIONS
MAXIMUM ALLOWABLE PENSION FUND
Changes to be put in place in 2014 to reduce the maximum allowable pension fund (the Standard Fund Threshold) in order to reduce the maximum tax relieved pension to €60,000 p.a.
ACCESS TO ADDITIONAL VOLUNTARY CONTRIBUTIONS
Individuals will be allowed a once-off option to withdraw up to 30% of the value of Additional Voluntary Contributions. Withdrawals will be liable to tax at the individual’s marginal rate of tax. Option will be available for 3 years from the passing of Finance Bill 2013.
PENSION LEVY
Pension Levy of 0.6% will not extend beyond the original proposed end date of 2014.
INCOME TAX
MATERNITY BENEFIT
This will be taxable with effect from 1 July 2013
TOP SLICING RELIEF
Will no longer be available from 1 January 2013 on ex-gratia lump sums where the non-statutory payment is €200,000 or over.
UNIVERSAL SOCIAL CHARGE
The standard rates of USC will apply to people aged 70 years of age and over and medical card holders (PAYE/self-employed income earners) earning €60,000 and above with effect from 1 January 2013.
PRSI
The weekly PRSI allowance is being removed. Increase in the minimum annual PRSI contribution for selfemployed earners from €253 to €500.
FOREIGN EARNINGS DEDUCTION
The Foreign Earnings Deduction is being extended for employment related travel to certain African countries.
CHARITABLE DONATIONS
A blended rate of relief of 31% on charitable donations is being introduced.
BIK ON PREFERENTIAL LOANS
The interest rate used in calculating the taxable benefit is being increased from 12.5% to 13.5% other than for home loans. The specified rate used to calculate the taxable benefit from home loans is decreased from 5.0% to 4.0%
EMPLOYMENT & INVESTMENT INCENTIVE (EII)
The EII scheme is being extended from 2014 to 2020.
RELIEFS AND EXEMPTIONS
FILM RELIEF
The Film Tax Relief Scheme is being extended to 2020.
AVIATION SECTOR
An accelerated capital allowance scheme, over seven years, in relation to construction of certain aviation-specific facilities is to be introduced.
LOCAL PROPERTY TAX
Local Property Tax (LPT) will be charged at 0.18% of market value up to €1 million.
A rate of 0.25% will apply to any excess value over €1 million. Collection of the Local Property Tax (LPT) will commence on 1 July 2013 and will be administered by the Revenue Commissioners.
A half-year of LPT will be payable in 2013, full year payable in subsequent years.
The Household Charge will cease with effect from 1 January 2013.
The Non-Principal Private Residence (NPPR) Charge will cease with effect from 1 January 2014.
CAPITAL TAXES
CAPITAL GAINS TAX
Increased to 33% and applies to disposals made after 5 December 2012.
CAPITAL ACQUISITIONS TAX
Increased to 33% and applies in respect of gifts or inheritances received after 5 December 2012.
The current group tax free thresholds are being reduced by 10%. This reduction applies in respect of gifts or inheritances taken after 5 December 2012.
EXCISE DUTIES
VEHICLE REGISTRATION TAX (VRT)
Rates of VRT are being increased with effect from 1 January 2013.
MOTOR TAX
Motor Tax rates across all categories will increase with effect from 1 January 2013.
ALCOHOL PRODUCTS
The excise duty on a pint of beer or cider, and a standard measure of spirits is being increased by 10c (including VAT). Duty on a 75cl bottle of wine is being increased by €1 (including VAT), with pro-rata increases on other products.
TOBACCO PRODUCTS
The excise duty on a packet of 20 cigarettes is being increased by 10 cents (including VAT) with a pro-rata increase on the other tobacco products, with effect from midnight on 5 December 2012.
The excise duty on roll-your-own tobacco is also being increased by 50c per 25g pouch
These increases will take effect from midnight on 5 December 2012.
CORPORATION TAX
3 YEAR RELIEF FOR START UP COMPANIES
This relief is being extended to allow any unused relief arising in the first 3 years of trading due to insufficiency of profits to be carried forward for use in subsequent years. This is subject to the maximum amount of relief in any one year not exceeding the eligible amount of Employers’ PRSI in that year.
R&D TAX CREDIT
The R&D Tax Credit regime provides for a 25% tax credit for incremental expenditure on certain research and development (R&D).
Finance Act 2012 provided that the first €100,000 of qualifying R&D expenditure would benefit from the tax credit without reference to the original 2003 threshold. The amount of
expenditure is being increased to €200,000.
CLOSE COMPANY SURCHARGE
The de minimis amount of undistributed investment and rental income which may be retained by a close company without giving rise to a surcharge on such income is being increased from €635 to €2,000.
REAL ESTATE INVESTMENT TRUSTS (REITs)
The internationally recognised model for property investment – Real Estate Investment Trusts (REITs) – is to be introduced.
VAT
INCREASE IN CASH RECEIPTS VAT ACCOUNTING
The annual VAT cash receipts basis threshold is being increased from €1 million to €1.25 million with effect from 1 May 2013.
TAX ON SAVINGS
DEPOSIT INTEREST RETENTION TAX & EXIT TAX ON LIFE
ASSURANCE POLICIES AND INVESTMENT FUNDS
DIRT together with the rates of exit tax that apply to life assurance policies and investment funds is being increased to 33% for payments made annually or more frequently and to 36% for payments made less frequently than annually.
The increased rates will apply to payments, including deemed payments, made on or after 1 January 2013.
For further details on the budget or any queries, please contact us at 091-871613 or 087-1202405.