Something for everyone

• Personal tax credits, employee tax credit and earned income credit all increased
• Increase of EUR2,000 bringing the income tax standard rate (20%) band to EUR44,000
• Increase of 2% USC band ceiling up to EUR27,382. USC rate of 4% reduced to 3%
• EII investments ceiling doubled from EUR500,000 to EUR1m (until end of 2026)
• Donations to sports bodies: individuals can choose to claim the tax relief rather than passing it to the organisation.

Gift and inheritance tax

• Parent/child Group A threshold to increase from EUR335,000 to EUR400,000 with effect from 2 October 2024
• Increases in thresholds for Group B (certain relatives) and Group C (others) to EUR40,000 and EUR20,000 respectively
• No change to 33% rate
• Agricultural relief: new test introduced:- land must be actively farmed by donor for at least 6 years prior to the gift/inheritance.

Pensions

• Standard fund threshold to rise from EUR2m to EUR2.8m by 2029 (EUR200,000 per year from 2026)
• Tax efficient pension lump sum to remain at EUR500,000
• No change announced to PRSAs but may be contained in next week’s Finance Bill.

Property related tax measures

• Rent tax credit to be increased from EUR750 to EUR1,000 (EUR2,000 per couple)
• New 6% residential property stamp duty rate on purchase price in excess of EUR1.5m with effect from tonight. The rate is still 1% on the first EUR1m and 2% on the next EUR500,000
• Stamp duty rate for bulk purchases of residential property increased from 10% to 15% where 10 or more units purchased in a 12-month period
• Vacant Homes Tax – annual charge increased from 5 times to 7 times the LPT charge for the property from November 2024.

Employee benefits

• Employee annual small benefit exemption extended from EUR1,000 to EUR1,500 per year and to include
• up to 5 benefits per year (previously 2)
• BIK exemption on provision of home EV chargers for directors/employees
• Company car tax break for first EUR10,000 of low emissions vehicles (EUR45,000 for EVs) extended a further year into 2025.

Retirement relief

• Last year’s announcement to introduce a cap of EUR10m for CGT retirement relief on transfers of businesses to children has been softened
• It appears that transfers by parents aged between 55 and 70 will still qualify for relief in excess of EUR10m but subject to a 12-year potential clawback if the business is sold (details to follow in the Finance Bill)
• From 1 January 2025 the EUR3m cap will apply to transfers after reaching age 70.

No changes announced to:

• Taxation of investment funds/ETFs (for now), but still under review
• Capital gains tax entrepreneur relief
• Tax residence rules
• Remittance basis for non-domiciled individuals
• 7.5% stamp duty on commercial property.

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