Irish Budget 2019 – Main points
The main takeaways from Budget ’20 in respect of personal finances are as follows:
“No personal tax cuts at this time of economic uncertainty”
Personal Income Tax rates remain at 20% and 40%. There was no mention of Universal Social Charge (USC) taxes or PRSI which are assumed to remain unchanged.
The budget statement did not specify any changes to PAYE earnings bands. We will need to wait for the Finance Bill to see if any amendments are being made.
Earned income tax credit for the self employed increasing to €1,500 (+ €150)
Dividend Withholding Tax (DWT)
DWT will increase from 20% to 25%. (Higher rate taxpayers need to continue paying the difference between DWT and their marginal tax rate to Revenue in their annual return).
Capital Gains Tax (CGT)
No change to 33% rate.
CGT Entrepreneur relief at reduced 10% rate unchanged but under review (presumably for increase to size of gains exempted).
Inheritance Tax (CAT)
The tax-free threshold for an inheritance from parents to a child (Group A) will increase by €15,000 to €335,000.
There is no change to Group B or Group C thresholds.
The €3,000 annual gift exemption remains unchanged.
Employment Investment Incentive (EII)
Tax relief @40% on EII eligible investments will now apply fully in year one compared to 30% in year one and 10% in year four as before.
The Help to Buy scheme for first-time buyers will be extended for two years.
Stamp duty for residential property transactions will remain at 1% up to €1m and 2% for amounts above €1m, but commercial stamp duty will rise by 1.5% to a new rate of 7.5%
Child Benefit & Free GP Care for Children
Child benefit remains unchanged at €140 per month for each child up to age 18 if they are in full-time education.
Free GP care to be introduced for children under 8 and free dental care for children under 6.
The State contributory pension remains unchanged at a maximum weekly payment of €248.
(Note: If currently aged under 57 you will not qualify for State pension until you reach age 68).
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