December 2018 Ireland Release - Tax updates from Budget 2019

Our December 2018 Ireland release includes updates announced in Budget 2019.  The tax rules in Voyant Adviser and AdviserGo Ireland have been updated to account for the following changes for the 2019 tax year.

 

Highlights

  • An increase of €750 in the income tax standard rate band for all earners, from €34,550 to €35,300 for single individuals and from €43,550 to €44,300 for married one earner couples.
  • An increase in the Earned Income Credit from €1,150 to €1,350.
  • No changes to income tax rates. Income tax rates remain 20% and 40%.
  • Incomes of €13,000 or less are exempt from USC. The USC rate for incomes between €19,874 – €70,044 is to be reduced from 4.75% to 4.5%.
  • Mortgage Interest relief on loans used to purchase, develop or repair a residential property will be granted at 100% 1 January 2019.

 

Income Tax and Levies

The main change in terms of income tax are the minor reductions targeted at “middle income earners” while the Standard rate income threshold has increased by €750.

For the self-employed the additional surcharge on income in excess of €100,000 appears to remain. However, self-employed individuals will now benefit from an increased earned income credit of €1,350, an increase of €200 from last year’s budget.

 

Universal Social Charges
USC Rates & Bands from 1 January 2020:

Incomes of €13,000 are exempt.

Otherwise:

• €0 – €12,012 @ 0.5%
• €12,012 – €19,874 @ 2%
• €19,874 – €70,044 @ 4.5%
• €70,044+ @ 8%
• Self-employed income over €100,000: 3% surcharge

 

Tax Bands Amendments

• €34,550 to €35,300 for single individuals and €1500 (married, both working) to €70,600
• €43,550 to €44,300 for married one earner couples.

 

Property

Landlords will also benefit with the news that from January 2019 Mortgage Interest Relief will be accelerated thereby allowing 100% of interest on loans to purchase, develop or repair a residential property against income.

 

Capital Acquisitions Tax (CAT)

The current Group A tax free threshold which applies primarily to gifts and inheritances from parents to their children is being increased from €310,000 to €320,000.

Group B or C Thresholds remain unchanged.

 

Pensions

No changes were announced with respect to private pensions.