News

Personal Tax

Minor Cuts to USC rates
Increase to the income tax standard rate bands for singles from €33,800 to €34,500 and for marrieds from €42,800 to €43,550
Increase in earned income credit of €200 for self- employed individuals
Increase in home carer tax credit of €100
Mortgage interest relief ceases in 2021. Tapered relief from 2018 to 2020
Pre-letting expenses on residential rental properties of up to €5,000 per property may be claimed as a deduction

Business Tax

Share-based remuneration incentive to be introduced, subjecting profits to capital gains tax in place of income tax
Capital allowances on intangible assets restricted to 80% of income generated from these assets
Accelerated capital allowances for energy-efficient equipment extended to end of 2020
0% benefit-in-kind in 2018 for electric vehicles
0.1% increase in employer PRSI contribution from 10.75% to 10.85%

VAT

VAT refund scheme for charities to be introduced in 2019 in respect of 2018 costs based on non-public funding;

Capital Gains Tax / Capital Acquisitions Tax

Capital gains tax exemption for qualifying property to be held for 7 years, now may be sold between years 4 and 7 and remain exempt

Stamp duty

Stamp duty on commercial property increased from 2% to 6% Full details are attached in this budget summary here

Background of the Callaghan Case

The couple reside in a 3 bedroom semi-detached property with their 3 young children.  The couple had a mortgage with KBC for €285,647 for their family home which was valued at just €105,000.

PIP’s Proposal

The PIP proposed a reduced interest rate of 2.5% from 4.5% for the period of the PIA and thereafter reverts to 4.5% for the remainder of the mortgage.  The mortgage to be extended by 6 years until Mr. Callaghan reached 70 years of age and a write off of €165,647.

KBC’s Proposal

The bank proposed  to split the debt into an active and warehoused mortgage of €135,000 each and a write off of €15,647.  As part of the proposal the warehoused mortgage would carry 0% interest and the couple could reside in the home for the rest of their lives.

Baker Ruling

The Judge ruled in favour of the couple and rejected the warehousing of €135,000 as the warehoused is not proportionate to, or reasonably derived from, the current income and capital assets, or any future ascertainable means.  The Judge confirmed that warehousing of a mortgage debt is permissible in principle, but it was not reasonable in the circumstances of this case.

To read the full judgement please click on the link here