BUDGET 2018 – From GSRMA Tax Consultant Mary Farrell

BUDGET 2018

Most of the changes were well flagged. I will deal with the ones affecting income first.

Income Tax

The point at which the higher rate of tax comes into effect will rise next year by €750 per annum for a single person and a married couple with one income earner.

2017 2018
Rate Band- Single €33,750.00 €34,500.00
Married – One Income €42,800.00 €43,550.00

 

     Universal Social Charge

The exemption of €13,000.00 remains in place. For anyone with relevant income (Non- Department of Social Protection Income) over that amount there are changes to the bands.

2017 2018
0-€12012 1% 0-€12012 0.50%
€12,013-18,668 2.5% €12,013-19,372 2%
€18,668-€70,044 5% €19,372-€70,044 4.75%
Over €70,045 8% Over €70,045 8%

The USC relief for medical card holders is being extended for a further two years. Medical card holders and individuals aged 70 years and older whose aggregate income does not exceed €60,000 will now pay a maximum USC rate of 2%.

Rental Property

Pre-letting ExpensesRented Residential Property

A new deduction is being introduced for pre-letting expenses of a revenue nature incurred on a property that has been vacant for a period of 12 months or more. A cap on allowable expenses of €5,000 per property will apply, and the relief will be subject to clawback if the property is withdrawn from the rental market within 4 years. The relief will be available for qualifying expenses incurred up to the end of 2021.

This is new and the Finance Act will have the definitive terms, so we must wait!

VAT

Increase in the VAT rate on sunbeds from 13.5% to 23% , The VAT rate on sunbed services is being increased from 13.5% to the standard rate of 23% from 1 January 2018.

Capital Gains Tax

This is very important for anyone who acquired property in the period 7/11/2011 to 31/12/2014. There is a CGT holiday if the person holds the property for 7 years. An amendment will be made to Section 604 of the Taxes Consolidation Act 1997, otherwise known as the 7-year CGT relief, which will allow the owners of qualifying assets to sell those assets between the fourth and seventh anniversaries of their acquisition and still enjoy a full relief from CGT on any chargeable gains, according to the Department of Finance.

Capital Acquisitions Tax

Treatment of solar farms for the purposes of the Capital Acquisitions Tax (CAT) agricultural relief; Capital Gains Tax (CGT) retirement relief For the purpose of CAT agricultural relief and CGT retirement relief, agricultural land placed under solar infrastructure will continue to be classified as agricultural land (formerly it would no-longer have been deemed agricultural land), but with a condition restricting the amount of the farmland that can be used for solar infrastructure to 50 per cent of the total farm acreage.

It is very surprising that there is no movement in the Threshold amounts. This may change in the Finance Act however.

Stamp Duty

Change of rate of Stamp Duty on Non-Residential Property from 2% to 6%

This will be a worry for anyone transferring farm land.

 

 Extension of Consanguinity Relief and Change of Rate of Relief

This applies to family transfers. It is being extended to 2020 but is no help if the person transferring is 67 years of age.

 

Excise Duties

Cigarettes

The excise duty on a packet of 20 cigarettes is being increased by 50 cents (including VAT) with a pro-rata increase on the other tobacco products, This will take effect from midnight on 10 October 2017.

Sugar

A tax on sugar sweetened beverages is to be introduced on 1 April 2018. The tax will apply to sugar sweetened drinks with a sugar content between 5 grams and 8 grams per 100ml at a rate of 20c per litre. A second rate will apply for drinks with a sugar content of 8 grams or above at 30c per litre.

Alcohol

This appears to have escaped unscathed.

  Mary Farrell

10th Oct 2017

One Response to BUDGET 2018 – From GSRMA Tax Consultant Mary Farrell

  1. timothy October 16, 2017 at 9:24 pm #

    Thanks. This is a helpful guide and a good reference. I iake it that it will also feature in a future Siochan Magazine edition.

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