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Inheritance Tax Changes – UK Taxes – 2025

Best Inheritance Tax Advisors

Inheritance Tax (IHT), UK Taxes, Capital Acquisitions Tax.

 

The 2024 Autumn Budget announced a series of changes to UK Inheritance Tax.  As you’re aware, in the UK, Inheritance Tax is a tax payable on the value of a deceased person’s estate.  This differs to Irish Capital Acquisitions Tax where the beneficiary pays CAT on gifts and/or inheritances.

 

 

Current Rules

Currently, UK IHT is charged at 40% on the value of an estate above the tax-free allowance i.e. the Nil Rate Band of £325,000. This tax-free allowance can be further increased by a Residential Nil Rate Band of £175,000 providing you leave your home to direct descendants i.e. children, step children, grandchildren, etc.  As a result, this brings up the total tax-free allowance to £500,000 per person.  In certain circumstances, this could potentially equate to £1 million for a couple.  These thresholds were fixed until April 2030 in the Autumn Budget.  If, however, your estate is worth less than £325,000 when you die, then any unused amount up to the threshold limit can be added to the surviving spouse’s/partner’s threshold amount.

 

 

 

New Rules

From 6th April 2025, the rules for taxing non-UK domiciled individuals will be replaced by a tax residence-based system.  This will apply to long-term residents owning non-UK property who were previously outside the scope of UK Inheritance Tax.  UK assets will always remain within the scope of inheritance tax.  Therefore, from 6th April 2025 onwards, individuals who have held non-domicile status will no longer be exempt from Inheritance Tax on their foreign assets. Instead tax will be based on the individual’s residency status.

 

 

Non-UK assets will be within the scope of UK Inheritance tax if an individual qualifies as a long-term resident.  This means that anyone who has been resident in the UK for ten out of the last twenty years will be subject to Inheritance Tax on their worldwide assets.  This is assessed using the same statutory residence test currently applied for Income Tax and Capital Gains Tax purposes.  It’s important to keep in mind that where an individual ceases to be UK resident after 6th April 2025, there will be an “IHT tail.”  This effectively means that an individual can remain within the scope of UK Inheritance Tax, on their worldwide assets, for a period of up to ten years after ceasing their UK residence.

 

In summary, from 6th April 2025, the concept of domicile will no longer determine exposure to inheritance tax.  Instead, it will be replaced with the concept of a long-term resident.

 

 

 

For further information, please click:

 

https://www.gov.uk/inheritance-tax

 

 

https://www.gov.uk/government/publications/2024-non-uk-domiciled-individuals-policy-summary/changes-to-the-taxation-of-non-uk-domiciled-individuals

 

 

 

 

For all your Irish or cross-border gift or inheritance concerns, please contact us on queries@accountsadvicecentre.ie.

 

 

 

 

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

 

 

 

 

 

Inheritance Tax Changes – UK IHT – Tax Reliefs

Best UK Tax Advisors for Gifts and Inheritances

Inheritance Tax, UK IHT, UK Taxes, Agricultural Property Relief, Business Property Relief, Gift and Inheritance Tax

 

The UK Autumn Budget 2024 announced changes to the current Agricultural and Business Property Inheritance Tax regimes.  From 6th April 2026, the combined Agricultural Property Relief and Business Property Relief will be restricted to the first £1 million on “qualifying assets.”  The Chancellor of the Exchequer delivered her Budget on 30th October 2024, announcing 100% relief for the first £1 million pounds of combined assets and 50% Relief thereafter.  Currently, Agricultural Relief offers two potential rates of Inheritance Tax Relief.  These depend on the circumstances of ownership. These rates will remain in place until 5th April 2026.

 

 

 

Old Regime – Agricultural Property Relief

 

Agricultural Property Relief is an Inheritance tax relief for farmers and landowners.  It provides for either 50% or 100% relief on the agricultural value of land and certain buildings.

 

For the 100% Relief to apply:

  1. the property must be in the owner’s vacant possession i.e. the owner or transferor has the immediate right to vacant possession of the property or the right to obtain it within the next twelve months.

 

  1. the land must be let with the tenancy having commenced on/after 1st September 1995.

 

  1. the land must be let and conditions regarding vacant possession must be complied with – This applies by concession.

 

  1. the owner had been entitled to his interest in the property since before 10th March 1981 and has met the conditions for ‘Working Farmer Relief”.

 

The 50% Relief is available in circumstances where the above conditions aren’t met.

 

If the property is owner-occupied, it must have been owned and used for agricultural purposes for at least two years ending with the date of the transfer.  If, however, the property is let to a tenant, it must have been owned by the transferor for at least seven years, ending with the date of the transfer, and the land must have been actively farmed during that time.  The property must not be subject to a binding contract of sale on disposal.

 

Additional rules apply in relation to successive transfers.

 

Agricultural property includes agricultural land or pasture, grazing land, cottages, farmhouses, farm buildings, woodlands and buildings used in intensive animal rearing, etc.

 

 

 

Old Regime – Business Property Relief

 

Business Property Relief is a relief from IHT which applies to the transfer of relevant business property.  100% relief is available on the following assets (i) a business or interest in a business operating as a sole trade or partnership and (ii) shares in an unlisted trading company which the donor has owned for a minimum of two years

 

50% Relief is available on the transfer of shares in a quoted trading company where the donor has a controlling interest (i.e. 51%) in the company.  The 50% rate also applies to land and buildings, including plant and machinery, where those assets are used by the donor’s partnership or by a company they control.

 

With regard to lifetime gifts, Business Property Relief is only available on death provided the donee still owns the relevant business property at the time of death.

 

If the business owns investments, Business Property Relief is restricted to the business assets. In other words, BPR does not apply to any ‘excepted assets’ in the balance sheet. An ‘excepted asset’ is one which is not used wholly or mainly for the purposes of a trade.

 

 

 

New Regime

From 6th April 2026, the combined Agricultural Property Relief and Business Property Relief will only be available on the first £1 million on qualifying assets. If the individual owns qualifying assets above this threshold amount of £1 million, the rate of the Relief will be reduced to 50% of the excess.  This means, from 6th April 2026, an effective IHT tax rate of 20% will apply to the value of qualifying assets above £1 million.

 

Assets automatically qualifying for the 50% relief rate will not use up the £1 million allowance.

 

It’s important to keep in mind that any unused part of the £1 million allowance cannot be transferred between spouses in the way that the NIL Rate Band can.

 

This allowance will not apply to AIM-listed shares and other similar shares not listed on a recognised stock exchange.  Instead, they will be entitled to the 50% rate of Relief.

 

The new rules will apply for lifetime transfers on/after 30th October 2024 in situations where the donor dies on/after 6th April 2026.

 

The Inheritance Tax liability arising on assets which qualify for Agricultural Property Relief and Business Property Relief can be paid by way of equal annual instalments, over a ten-year period, in certain circumstances.

 

Full exemptions for transfers between spouses and civil partners will continue to apply i.e.  any agricultural and business assets left to a surviving spouse or civil partner will be tax free.

 

 

 

 

For further information, please click:

 

https://www.gov.uk/government/publications/agricultural-property-relief-and-environmental-land-management

 

https://www.gov.uk/government/news/what-are-the-changes-to-agricultural-property-relief

 

 

 

 

 

Following the Inheritance Tax changes in the Autumn Budget 2024, it’s time to consider the practical consequences and what you can do to protect your family wealth.  For expert advice and assistance, please contact us on queries@accountsadvicecentre.ie

 

 

 

 

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

 

Revenue Income Tax & Corporation Tax non-filer Programme

Revenue Compliance Intervention

Income Tax Returns, Corporation Tax Returns, Level 1 Compliance Intervention, Revenue Non-Filer

 

As part of the Irish Revenue Commissioners’ Annual Non-Filer Programme, Notices will be sent to taxpayers who are currently registered for Income Tax or Corporation Tax but who have not filed Income Tax or Corporation Tax Returns for tax years up to and including 2023.  Tax Agents will receive a ROS Inbox Notification on 31st January 2025 providing them with a list of clients who have been issued with a Reminder to File Notice.  Please be aware that this notice is what is deemed to be a Level 1 Compliance Intervention.

 

If you have received a Notice but you are no longer considered to be a “Chargeable Person”, the advice is to cancel your Income Tax or Corporation Tax registration as soon as possible.

 

For full information on who is deemed to be a “Chargeable Person” please click:

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-41a/41a-01-01.pdf

 

 

According to Revenue’s “Reminder to file – Income Tax Return” Notice:

“This notice is a Level 1 Compliance Intervention in accordance with Revenue’s Compliance Intervention Framework. The non-filing of a required tax return by chargeable persons can result in a penalty charge and a more detailed review by Revenue. It is also an offence for which a person can be prosecuted. Further information on your rights and obligations under Revenue’s Compliance Intervention Framework can be found on www.revenue.ie.

 

In addition, if the tax return(s) is not filed it may lead to the loss or refusal of tax clearance.”

 

 

 

According to Revenue’s “Reminder to file – Corporation Tax Return” Notice:

This notice is a Level 1 Compliance Intervention in accordance with Revenue’s Compliance Intervention Framework. The non-filing of a required tax return can result in a more detailed review by Revenue. It is also an offence for which a person can be prosecuted. It can also result in the restriction of certain reliefs, and the loss or refusal of tax clearance. Further information on your rights and obligations under Revenue’s Compliance Intervention Framework can be found on www.revenue.ie.

 

 

 

 

For further information, please click:
https://www.revenue.ie/en/tax-professionals/tdm-wm/compliance/returnscompliance/it-and-ct-returnscompliance/income-tax-and-corporation-tax-non-filer-programme.pdf

 

 

 

If you receive a Level 1 Notification and you are required to file Tax Returns for outstanding years, please contact us at queries@accountsadvicecentre.ie

 

 

 


Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

 

 

Residential Zoned Land Tax (RZLT) – ROS Portal

Tax Advisors for Landowners

Residential Zoned Land Tax (RZLT), Finance Act 2024, Landowners tax, Self assessment tax

 

As you already know, Residential Zoned Land Tax (RZLT) was introduced by Finance Act 2021.  In case you didn’t, it’s an annual self-assessment tax calculated at 3% of the market value of applicable land, with pay and file obligations levied on the landowners.  While it was first introduced in 2022, the first year that a tax liability is actually payable is 2025. The Revenue Commissioners confirmed that the RZLT registration portal is scheduled to go live on 27th January 2025.   The due date for the landowners to file a Return and pay the relevant tax is on or before 23rd May 2025. Going forward, an annual tax return must be submitted to Revenue, and any tax liability paid by 23rd May every year. The landowner is required to determine and declare the market value of the land to Revenue.  The revised final maps are due to be published by local authorities by 31st January 2025.

 

RZLT applies to land which was zoned as being suitable for residential development and adequately serviced since 1st January 2022, and on which development has not commenced up to 1st February 2025.  Finance Act 2024 introduced an exemption from RZLT in situations where legal proceedings are ongoing.

 

The RZLT portal will be available on ROS or MyAccount by clicking the My Services and then clicking Manage Residential Zoned Land Tax in Other Services.  Once registered, Revenue will assign a unique site identification number which will take up to one working day.  Receipt of Filing confirmation in the ROS Inbox will require an overnight update.

 

 

 

For further information, please click:
Revenue eBrief No. 018/25
Revenue eBrief No. 019/25

 

 


Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

IMPORTANT TAX DATES – JANUARY 2025 – IRELAND

Best Tax Advisors Dublin under all tax heads

Income Tax. Corporation Tax. Capital Acquisitions Tax. Capital Gains Tax. Local Property Tax. VAT. Pay and File Deadlines.

 

 

January is a very important month in terms of pay and file obligations.  To avoid exposure to interest and penalties, please find below a list of pay and file deadline dates for January 2025 under the following tax heads: Income Tax, Corporation Tax, VAT, Local Property Tax, Capital Gains Tax, Capital Acquisitions Tax, Dividend Withholding Tax and Professional Services Withholding Tax.

 

 

1st January 2025

 

  • 2024 Employment Detail Summary is available.

 

  • The minimum Wage Increased to €13.50 per hour.

 

  • Changes to USC – The 4% rate is reduced to 3% and the entry threshold increases to €27,382.01

 

  • Changes to Rate Bands from €42,000 to €44,000 for individuals. Married couples and civil partners with one income will increase to €53,000 and married couples and civil partners with two incomes will increase to €88,000.

 

  • Increases from €1,875 to €2,000 for Single Persons, Employee PAYE Tax Credit, Earned Income Tax Credits and Widowed Person or Surviving Civil Partner with dependent child(ren).

 

  • Commencement of phased payments for Local Property Tax.

 

  • Increases in VAT thresholds for goods and services. From €40,000 to €42,500 for services. From €80,000 to €85,000 for goods.

 

  • The increased thresholds for Capital Acquisitions Tax: From €335,000 to €400,000 (Group Class A), from €32,500 to €40,000 (Group Class B) and €16,250 to €20,000 (Group Class C)

 

 

 

10th January 2025

 

Latest date for paying Local Property Tax in full through an approved PSP, or by debit or credit card.

 

 

 

14th January 2025

 

  • Monthly Return and payment for PAYE, PRSI and USC for December 2024 – The payment date is extended to 23rd for users who pay and file via ROS.

 

 

  • Quarterly Return and payment for PAYE, PRSI and USC for the period October to December 2024 – The payment date is extended to 23rd for users who pay and file via ROS.

 

 

  • Return and payment of Dividend Withholding Tax for December 2024

 

 

  •  F30 Monthly Return and payment of Professional Services Withholding Tax for December 2024

 

 

 

15th January 2025

 

Monthly direct debit payments for Local Property Tax (LPT) start and continue on the 15th day of every month, thereafter.  Date extended to 21st March 2025 if paying by Annual Debit Instruction.

 

 

 

19th January 2025

 

  • Monthly VAT3 Return & Payment for December 2024.

 

  • Bi-Monthly VAT3 Return & Payment for period 1st November to 31st December 2024.

 

  • Four Monthly VAT3 Return & Payment for period 1st September to 31st December 2024.

 

  • Bi-Annual VAT3 Return and payment for period 1st July to 31st December 2024.

 

  • Annual VAT3 Return and payment for period 1st January to 31st December.

 

 

Return of Trading Detail:

  • where the VAT accounting period ends between 1st and 31st December and monthly VAT3 Returns are filed.

 

  • where the VAT accounting period ends between 1st November and 31st December and bi-monthly VAT3 Returns are filed.

 

  • where the VAT accounting period ends between 1st September and 31st December and four-monthly VAT3 Returns are filed.

 

  • where the VAT accounting period ends between 1st and 31st December and annual VAT3 Returns are filed.

 

For ROS filers, the time limit for filing a VAT return is extended to the 23rd day of the month.

 

 

 

1st to 21st January 2025

 

  • Corporation Tax Preliminary Tax for Accounting Periods ending between 1st and 28th February 2025

 

  • Corporation Tax Returns for Accounting Periods ending between 1st and 30th April 2024.

 

  •  Corporation Tax Balancing payments due for Accounting Periods ending between 1st and 30th April 2024

 

For ROS filers, the time limit for filing a CT Return and/or payment is extended to the 23rd day of the month.

 

 

 

31st January 2025

 

  • Payment of capital gains tax for assets sold between 1st December 2024 and 31st December 2024

 

  • OSS VAT return and payment for the period 1st October to 31st December 2024

 

  • IOSS Monthly Return and payment due for period December 2024.

 

 

 

 

For VAT details, please click:

https://www.revenue.ie/en/vat/vat-registration/who-should-register-for-vat/vat-thresholds.aspx

 

https://www.revenue.ie/en/vat/vat-ecommerce/import-oss/index.aspx

 

 

 

For information on Standard Rate Bands and Tax Credits, please click:

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/tax-relief-charts/index.aspx

 

 

 

For further information on Local Property Tax, please click:

https://www.revenue.ie/en/property/local-property-tax/paying-your-lpt/index.aspx

 

 

 

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Business Taxes – Autumn Budget 2024 – UK

Best Business and Corporation Tax Advisors

Business Tax. Corporation Tax. UK Taxes. Reliefs and Changes. UK Autumn Budget

 

 

Today, 30th October 2024, the Chancellor of the Exchequer, Rachel Reeves, delivered the UK Autumn Budget.  She announced the publication of the Corporation Tax Roadmap.  In it, she confirmed that there would be no change to the current corporation tax rate, which is capped at 25%, until 31st March 2027.  The Small Profits Rate and marginal relief will remain at their current rates and thresholds.  No changes will be made to other business tax areas including:

  1. The current Patent Box and Intangible Assets Regime which will be maintained.

 

  1. The Audio-Visual Expenditure Credit will be maintained.  The Video Game Expenditure Credit will also be retained.

 

  1. With regard to Capital Allowances, full expensing for plant and machinery expenditure will be retained.  The £1 million Annual Investment Allowance will also be maintained.

 

  1. 100% first year allowances for qualifying expenditure on zero-emission cars and electric vehicle charge points will be extended to 31st March 2026.

 

  1. In relation to R&D Reliefs, the current rates for the merged R&D Expenditure Credit Scheme as well as the Enhanced Support for R&D Intensive SMEs will be kept.

 

  1. Support to the global taxation agreements under Pillar 1 and Pillar 2 will continue.

 

 

 

Business Tax Changes

 

  • The Pillar Two Undertaxed Profits Rule will be introduced into law and will take effect from 31st December 2024.

 

  • The Government have introduced changes to the taxation of Employee Ownership Trusts and Employee Benefit Trusts which will take effect from 30th October 2024.

 

  • For 2025/26, Retail, Hospitality and Leisure businesses will be given 40% relief on their business rates. The maximum amount available in relief each billing year is £110,000 per business.

 

  • From 6th April 2025, the special tax rules for Furnished Holiday Lets will be abolished. Individuals, corporates, and trusts who operate or sell furnished holiday lettings accommodation will be affected.

 

  • Employer National Insurance contributions will increase to 15.0% from 6th April 2025. The secondary threshold will be reduced to £5,000 per year, the Employment Allowance will be increased to £10,500 per annum while the £100,000 threshold will be removed.

 

  • There will be further consultation on Transfer Pricing.

 

  • Changes to the treatment of carried interest. From April 2025, the CGT rate applicable to carried interest will increase to 32%.

 

 

 

 

Anti-Avoidance Legislation

 

The Government have introduced new Anti-Avoidance legislation in respect to loans to participators.  From 30th October 2024, these reforms will prevent shareholders from extracting untaxed funds from Close Companies. This new legislation is being introduced to prevent loans which are repaid and then reborrowed from associated companies from avoiding the s455 charge.

 

 

Also, from 30th October 2024, the way in which capital gains are taxed when a Limited Liability Partnership is liquidated has been amended. It relates to situations where assets are disposed of to (i) a contributing member, (ii) a connected company or (iii) any other connected person.  The chargeable gain accruing to the contributing member will be computed as if the gain had arisen at the time they initially contributed the asset to the Limited Liability Partnership.

 

 

 

 

 

For further information, please click:
https://www.gov.uk/government/collections/autumn-budget-2024-tax-related-documents

 

 

 

For all your Irish, UK or cross-border business tax concerns, please contact us on queries@accountsadvicecentre.ie

 

 

 

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

 

Pensions Auto-Enrolment Scheme – Ireland

Best Tax Advice on Pensions and Payroll

Auto-enrolment Pension Scheme. Payroll. Retirement Pension. No Income Tax Relief. Employers, Employees and Directors

 

Today, 7th October 2024, the Minister for Social Protection announced that the pensions auto-enrolment scheme will commence on 30th September 2025. From that date, employers must automatically enroll eligible workers into a workplace pension scheme, as part of a Government initiative, aimed at boosting retirement savings.  This government retirement savings system is for employees who are not already contributing into a pension scheme through their payroll. The Automatic Enrolment Retirement Savings Systems Act 2024 was signed into law on 9th July of 2024 and a commencement order was signed on 30th September 2024.  This scheme involves mandatory employer and employee contributions into a pension fund in addition to a Government top up.  With this new auto-enrolment scheme, most workers will now be entitled to (i) their own pension plus (ii) the State Pension on retirement.

 

 

So, what is it?

 

Under this new Act:

 

  • Employees will be automatically enrolled in this scheme if they are aged between 23 and 60 years. It’s important to keep in mind that the employee can voluntarily opt out after six months.

 

  • This auto-enrolment scheme will apply to every private sector worker in Ireland provided that the employee is not in what is termed “exempt employment.”

 

  • The employee must earn more than €20,000 gross per year. Gross pay includes allowances as well as non cash benefits.

 

  • For employees earning less than €20,000 per year or who are outside the prescribed age range, it is possible to opt in voluntarily.

 

  • Contributions will be made by (i) the employee, (ii) the employer and (iii) the Government.

 

  • The scheme will be managed by the National Automatic Enrolment Retirement Savings Authority which is under the supervision of the Pensions Authority.

 

  • In situations where an employee previously contributed to a pension but has since stopped, it is possible for that individual to be enrolled in the scheme, provided they meet the relevant criteria.

 

  • Employer AE contributions will not be taxed as a benefit-in-kind on the employee.

 

 

 

 

What is an “exempt employment”?

 

The scheme is aimed at employees who are not paying into a qualifying pension plan.  Therefore, an ‘exempt employment’ is deemed to be one where an employee or employer is already making contributions, through the payroll system, to any of the following: (a) an occupational pension scheme, (b) Personal Retirement Savings Account, (c) a Retirement Annuity Contract or (d) a Pan-European Personal Pension Product.

 

 

 

What are the Auto-enrolment contribution rates?

 

Contributions to the auto-enrolment pension scheme will be based on a set percentage of your wage/salary (please see below) and deducted through payroll.

 

Employers must match their employee contributions.

 

The Government must match one third of the employee contribution.

 

The Contributions will gradually increase over a ten year period.

 

The employee contributions will not qualify for income tax relief.

 

Contributions are capped at €80,000 of an employee’s gross annual salary/wage.  In other words, an upper annual limit of €80,000 applies to earnings.  No contributions are required on earnings exceeding this cap.  Employees earning more than €80,000 per annum can still contribute, however, employer and Government contributions will not apply to earnings above €80,000.

 

No. of Years

 

Employee Contribution 

Employer Contribution

Government Contribution

1  to 3 1.5% 1.5% 0.5%

 

4 to 6 3% 3% 1%

 

7 to 9 4.5% 4.5% 1.5%

 

10+ 6.0% 6.0% 2.0%

 

 

 

Final Points

 

  • As the Auto-Enrolment Pension Scheme operates throughout your career, you don’t have to do anything if you move jobs.

 

  • In the event of the death of an auto-enrolled employee, it is possible for their personal representative to apply to access the balance in the employee’s account, as part of their estate.

 

  • An employee can suspend contributions at any time.

 

  • Directors who deemed to be “self-employed” for PRSI purposes are not considered eligible to contribute to this Auto-Enrolment Pension Scheme.

 

  • The Automatic Enrolment Retirement Savings Systems Act 2024 provides for a number of offences, with sanctions ranging from fines of €5,000 to €50,000 and/or imprisonment, depending on the particular offence committed.

 

 

 

For further information, please click:

 

https://www.gov.ie/en/publication/c6d6a-auto-enrolment-your-questions-answered/?referrer=https://www.gov.ie/en/publication/01568-auto-enrolment-your-questions-answered-rol-draft/

 

 

https://www.irishstatutebook.ie/eli/2024/act/20/enacted/en/html

 

 

https://www.youtube.com/playlist?list=PLfOMyQE5RqGzeqOMKqB1M3KyOCtKU8bjk

 

 

 


Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

 

 

 

BUDGET IRELAND 2025 – Business Taxes

Corporate Tax Advice

Business Tax Advice. Corporation Tax. Research & Development (R&D), Capital Gains Tax (CGT)

 

The Minister for Finance Jack Chambers published his first Budget today  announcing a number of changes to our corporate tax regime.  A raft of tax measures and policies will be introduced to support Irish start-ups, small and medium-sized enterprises (SMEs) and multinational businesses.  Budget 2025 provided for a total budget package of €10.5b  Our focus in this article is purely on Business Taxes under Capital Gains Tax, Corporation Tax, VAT and Employer/Employee Taxes.

 

 

SUMMARY OF BUSINESS TAX MEASURES:

 

  1. There will be an increase in the VAT registration thresholds

 

  1. There will be an extension of the temporary 9% VAT rate in relation to supplies of gas and electricity for an additional six months.

 

  1. There will be an increase in the farmer’s flat rate addition from 1st January 2025.

 

  1. A new 9% VAT rate on heat pumps has been introduced.

 

  1. Employer/Employee Tax Changes – Amendments to Benefit-in-Kind (BIK) on cars

 

  1. Employer/Employee Tax Changes – There will be an increase in the annual employee Small Benefit Exemption from €1,000 to €1,500. A business will also be able to give five non-cash benefits to their employees in a single year.

 

  1. CGT Changes – Amendments to Retirement Relief.

 

  1. CGT Changes – Amendment to Relief for Angel Investors.

 

  1. Corporation Tax Changes

 

  1. Participation Exemption – Exemption for companies in receipt of Foreign Dividends

 

 

 

VALUE ADDED TAX (VAT)

 

  • With effect from 1st January 2025, the VAT registration thresholds will be increased from €40,000 to €42,500 for services.

 

  • The VAT registration thresholds will be increased from €80,000 to €85,000 for goods with effect from 1st January 2025.

 

  • The unregistered farmers flat rate scheme will be increased from 4.8% to 5.1%.

 

  • There will be an extension of the reduced 9% VAT rate on electricity and gas up to 30th April 2025.

 

  • From 1st January 2025, the 9% VAT rate will also apply to heat pump installations. This will have the effect of reducing the cost of replacing inefficient boilers.

 

 

 

EMPLOYER / EMPLOYEE TAXES

 

SMALL BENEFIT EXEMPTION

 

  • There will be an increase in the annual limit of the small benefit exemption from €1,000 to €1,500.

 

  • It has also been amended to allow five non-cash benefits, up from two, to be granted by an employer in a single year. The cumulative total of the first five benefits in a calendar year cannot exceed €1,500.

 

  • From 1st January 2024 an employer is required to return details of all qualifying incentives provided to employees where the small benefit exemption applies.

 

  • This benefit can be given to any employee of the company, including directors and shareholders, providing they are on the payroll.

 

 

BENFIT-IN-KIND

 

  • Budget 2025 introduced a BIK exemption for home car chargers provided by employers. It provides for an exemption from Benefit-in-Kind where it is the employer who incurs the cost of providing a facility for electric charging of vehicles at the home of an employee or director.

 

 

  • The proposed tapering of Benefit-in-Kind Relief for electric vehicles has been deferred. The universal relief of €10,000 which applied to the Original Market Value of a vehicle in Category A – D is being extended to 31st December 2025.  The amendment to the lower limit of the highest mileage band has also been extended until 31st December 2025.   Therefore, the highest mileage band is entered into at 48,001km.

 

 

CAPITAL GAINS TAX

 

Retirement Relief

 

Retirement Relief (CGT) supports the cost effective / tax efficient transfer of businesses and farms from one generation to the next.

 

Finance Act 2023 introduced a number of amendments to the Retirement Relief regime which included:

 

  1. an increase in the upper age limit from 66 years old to 70 years old.

 

  1. A cap of €10 million of proceeds / market value where the individual disposing of the assets to a child is aged from 55 to 69 years.

 

  1. The current limit of €3million will continue to apply but only from age seventy.

 

These changes were to come into effect on 1st January 2025.

 

Budget 2025 will retain the increased upper age limit. It also introduced a clawback period of twelve years on the Relief.

 

This means that any tax arising due to the cap of €10 million will be abated provided the assets are retained for twelve years.

 

In other words, the €10 million cap, due to be introduced on 1st January 2025, will only apply in circumstances where the child disposes of the assets within twelve years.

 

 

Angel Investor Relief

 

Angel Investor Relief, introduced in Budget 2024, was aimed at encouraging business angel investment in innovative start-ups.

 

Finance Act 2023 introduced a reduction on this rate for angel investors, bringing it down from 33% to 16% or 18%.

 

Budget 2025 provides Capital Gains Tax Relief for a third party individual who takes a significant minority shareholding (i.e. between 5% and 49% of the ordinary issued share capital of the company) for a period of at least three years,  in a certified innovative start-up small and medium enterprise (SME) company which is less than seven years old.   The investment by the individual must be in the form of fully paid-up newly issued shares costing at least €20,000 or €10,000 if acquiring between 5% and 49% of the ordinary issued share capital of the company.

 

Qualifying investors will be able to avail of an effective reduced rate of CGT of 16%, or 18% if through a partnership, on a gain up to twice the value of their initial investment.

 

There was previously a lifetime limit of €3 million on gains to which the reduced rate of CGT will apply.  Budget 2025 has increased this limit to lifetime gains of up to €10 million.

 

 Therefore, the amount on which the reduced CGT rates of 16% or 18% will apply is the lowest of the following:

  1. The actual chargeable gain.
  2. Twice the amount of the investment.
  3. €10 million less the total of all/any other chargeable gains that may qualify under this Relief.

 

 

 

CORPORATION TAX 

The following will be extended for a further two years until 31st December 2025:

 

  1. Employment Investment Incentive (EII),
  2. Start-Up Relief for Entrepreneurs (SURE) and
  3. the Start-Up Capital Incentive (SCI)

 

In addition, the EII limit on the amount that an investor can claim relief on will be doubled i.e. increasing from €500,000 to €1,000,000.

 

It is proposed to increase the SURE relief available to a maximum of €140,000 per year or a total of €980,000 over seven years.

 

 

Research and Development (R&D) Tax Credit

As you’re aware, the existing Research and Development (R&D) Tax Credit provides a 30% tax credit for all qualifying R&D expenditure.

 

The first year payment threshold will now increase from €50,000 to €75,000.

Companies with claims of between €75,000 and €150,000 will benefit from a €25,000 increase in the first instalment of their claim.

 

Companies with claims of in excess of €150,000 will continue to receive a first instalment amount based on 50% of the Research & Development Tax Credit claim.

 

 

Two new Audio-visual incentives

 

  1. Tax Credit for Unscripted Productions

 

A new tax credit will be introduced for the unscripted film production sector.

 

The relief will take the form of a 20% Corporation Tax Credit for certain production expenditure up to a maximum limit of €15 million per project.

 

The commencement will be subject to State Aid approval from the European Commission.

 

A cultural test will be introduced.

 

 

  1. Scéal Uplift

 

The second incentive is an 8% uplift referred to as the “Scéal Uplift”.

 

This involves an uplift of 8% to the existing film credit in respect of certain feature film productions.

 

It will be applied to the existing film credit and will result in a tax credit rate of 40% for projects with a maximum qualifying expenditure of up to €20 million.

 

This incentive is for small to medium budget productions under the Section 481 film tax credit.

 

As with the Tax Credit for Unscripted Productions, the Scéal Uplift is subject to State Aid approval.

 

  

FOREIGN DIVIDENDS

A new Participation exemption for foreign sourced dividends from subsidiaries in EU/EEA and tax treaty jurisdictions will be introduced with effect from 1st January 2025.  The aim is to simplify existing Double Taxation Relief provisions.

 

Currently, Ireland operates a worldwide corporate tax regime.  This means that all the profits (both domestic and foreign) earned by an Irish resident company are subject to Irish tax with Relief for any foreign taxes deducted under, a ‘tax and credit’ regime.

 

Under the new rules, a company will have the option of either (a) claiming the participation exemption or (b) continuing to use existing tax-and-credit relief.

 

To do this, an election will have to be made in the company’s annual corporation tax return. It will apply to all qualifying dividends in that particular period.

 

For non-qualifying jurisdictions, the existing method of claiming double taxation relief should continue.

 

The new participation exemption for foreign source dividends will come into effect from 1st January 2025.

 

 

 

For full information on Budget 2025, please click https://www.gov.ie/en/publication/e8315-budget-2025/

 

 

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

 

BUDGET IRELAND 2025 – Taxes in relation to Property

Advice on Property Taxes

Property Taxes Ireland

 

Understand the Tax measures of Budget 2025 which relate to property transactions, at a glance.

 

 

Today, the Minister for Finance and the Minister for Public Expenditure, NDP Delivery and Reform, announced the details of Budget 2025.

 

 

As anticipated, Budget 2025 introduced several tax measures in relation to property.

 

 

This article will focus on the property related tax measures introduced by Budget 2025, under Income Tax/Personal Tax, Residential Zoned Land Tax (RZLT), Stamp Duty, Vacant Homes Tax (VHT) and Value Added Tax (VAT).

 

 

 

 

INCOME TAX / PERSONAL TAX

 

 

 Rent Tax Credit

 

  • Budget 2025 raised the Rent Tax Credit

 

  • The Rent Tax Credit has been increased to €1,000 for individual renters, or €2,000 per year for jointly assessed married couples/civil partners.

 

  • This applies to the tax years 2024 and 2025.

 

  • Prior to this, the Rent Tax Credit for 2024 was worth €750 for a single individual and €1,500 for a jointly assessed married couple/civil partners.

 

  • As a result of Budget 2025, these new rates have been backdated to cover the 2024 tax year as well as the 2025 year of assessment.

 

 

 

 

 Mortgage Interest Relief

 

  • Mortgage Interest Relief has been extended.

 

  • There has been no change to the qualifying criteria.

 

  • Homeowners must have an outstanding mortgage balance on their principal private residence of between €80,000 and €500,000 as of 31st December 2022.

 

  • Qualifying homeowners will be eligible for this tax relief in respect of the increased interest paid on their mortgage in 2024 as compared with 2022.

 

  • Tax Relief is at the standard Income Tax rate of 20%.  The Tax Credit is capped at €1,250 per property.

 

  • To claim Mortgage Interest Relief, the taxpayer must file a Tax Return and the taxpayer must be compliant with Local Property Tax (LPT) requirements.

 

 

 

 

Help to Buy Scheme

 

  • The Help to Buy Scheme has been extended for a further four years at the current rates until the end of 2029.

 

  • The aim of the scheme is to provide certainty for future homebuyers as well as the Irish property market.

 

  • The Help to Buy Scheme is a tax rebate available to first-time buyers to enable them to buy a newly built or self-built house or apartment provided the cost of that purchase is €500,000 or less.

 

  • With the extension of this scheme, first-time buyers of residential property will be able to continue to avail of (i) Income Tax and (ii) Deposit Interest Retention Tax refunds to help them purchase their home.

 

  • The scheme offers a tax refund to first-time buyers, with a maximum value of €30,000 or 10% of the property price, whichever is less.

 

  • The refund will be from the four tax years prior to when the application is made.

 

  • The refund will not include any refunds already claimed.

 

 

 

 

Pre-Letting Expenses Relief

 

  • Under Pre-Letting Expenses Relief, the current tax relief, capped at €10,000 per premises, for certain pre-letting expenditure will be extended for a further three years to 31st December 2027.

 

  • Section 97A TCA ‘97, which deals with rental expenses, provides that certain expenses incurred on a vacant residential property before its first letting following a period of non-occupancy are allowable as a deduction against rental income from that specific premises.

 

  • To be allowable, the pre-letting expenses (capped at €10,000 per property) must be incurred on a property that was vacant for a minimum of six months and is then let as a residential property on/before 31st December 2027.

 

  • These provisions allow for a deduction for certain pre-letting expenses which, otherwise wouldn’t be allowable.

 

 

 

 

 

RESIDENTIAL ZONED LAND TAX (RZLT)

 

  • As part of its strategy to meet an increased demand for housing, the Irish Government introduced the Residential Zoned Land Tax (RZLT), which is a new tax on land which is zoned for residential development and which has, in place, all the necessary services to develop housing.

 

  • It was originally introduced in Finance Act 2021 and stated that owners of lands which are zoned under the RZLT were to be taxed at a rate of 3% of the site’s market value from 1st February each year commencing in 2025.

 

 

  • Owners whose properties are subject to Local Property Tax and have a garden exceeding one acre will not be obliged to pay Residential Zoned Land Tax. They will, however, be required to complete and file a Tax Return containing details of the property.

 

 

  • Budget 2025 has provided landowners with an option to re-zone their land, based on the economic activity carried out on their land and to seek changes to the zoning maps in advance of the final maps being published on 31st January 2025.

 

 

  • In summary, Budget 2025 has announced a new process available to certain landowners to obtain an exemption from the tax in 2025 where their land should not be subject to the tax.

 

 

  • Budget 2025 has also introduced a twelve month deferral of the liability between the date planning permission was granted and the commencement date of the development

 

 

 

 

 

 

STAMP DUTY

 

 

New 6% Residential Rate

 

A new 6% rate of Stamp Duty has been introduced on residential properties from 2nd October 2024.

 

The stamp duty rates for residential properties will now be as follows:

 

  • 1% on consideration up to and including €1m

 

  • 2% on consideration over €1m and up to and including €1.5m

 

  • 6% on consideration over €1.5m

 

The existing stamp duty rates will continue to apply to instruments executed before 1st January 2025 on foot of a binding contract in place before 2nd October 2024.

 

 

 

 

10% rate for Bulk Purchases increased to 15%

 

  • Where a person acquires at least ten residential units during any twelve month period, the higher rate of stamp duty is being increased from 10% to 15%, with immediate effect.

 

 

  • The existing 10% rate will continue to apply to instruments executed before 1st January 2025 where a binding contract was in place before 2nd October 2024.

 

 

 

 

 

 

VACANT HOMES TAX (VHT)

 

  • A Vacant Homes Tax (VHT) was introduced by the Irish Government in Finance Act 2022 to encourage an increase in the supply of residential properties available for rent or purchase. As a further incentive, Budget 2025 has increased the rate of the VHT from five to seven times a property’s existing base Local Property Tax (LPT) liability.

 

 

  • This will take effect from 1st November 2024 i.e. the next chargeable period for Vacant Homes Tax.

 

 

  • VHT applies to any residential property which is occupied for less than 30 days in a twelve month period between 1st November and 31st October of the following year.

 

 

 

 

 

VALUE ADDED TAX (VAT)

 

 

VAT Rate on Heat Pumps

 

  • A reduction in the VAT rate for heat pumps to 9% is effective from 1st January 2025.

 

  • This applies to the supply and installation of heat pumps.

 

  • The heat pumps must meet specific technical standards, as outlined in the EU Directive.

 

  • The aim is to encourage homeowners to install heat pumps to support climate action.

 

 

 

 

VAT Rate for Gas & Electricity

 

  • The 9% rate of VAT on gas and electricity is to be extended until 30th April 2025.

 

  • The rate had been due to revert to 13½% on 1st November 2024.

 

  • The aim of this extension is to reduce the cost of living.

 

 

 

 

 

For full information on Budget 2025, please click https://www.gov.ie/en/publication/e8315-budget-2025/

 

 

 

 

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

 

2025 Budget – Ireland – Personal Tax

Income Tax Advice

Personal Tax Advice – Budget Ireland 2025

 

Understand the Income Tax measures of Budget 2025 at a glance.

 

 

Today, the Minister for Finance, Jack Chambers T.D., and the Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe T.D., announced the details Budget 2025.  As anticipated, Budget 2025 introduced several tax measures affecting individuals, families and households.  This article will focus on the tax measure introduced by Budget 2025, specifically under the Income Tax or Personal Tax heading.

 

 

 

Standard rate band increased by €2,000

 

  • The income tax standard rate band has been increased by €2,000 for all earners, resulting in the band for single individuals increasing from €42,000 to €44,000

 

  • The band for Single, Widowed or Surviving civil partners, qualifying for the Single Person Child Carer Credit was raised from €46,000 to €48,000,

 

  • The band for married couples/civil partners with one earner will be increased from €51,000 to €53,000 for the 2025 tax year onwards.

 

 

 

Increase in Tax Credits

 

  • The Personal Tax Credit, Employee Tax Credit and Earned Income Credit will all be increased from €1,875 to €2,000.

 

  • The Home Carer Tax Credit has increased from €1,800 to €1,950.

 

  • The incapacitated child tax credit has been increased by €300 from €3,500 to €3,800.

 

  • The Single Person Child Carer Tax Credit will be increased from €1,750 to €1,900.

 

  • The Blind Tax Credit will be increased from €1,650 to €1,950.

 

  • The Dependant Relative Tax Credit will rise from €245 to €305.

 

  • The Rent Tax Credit has been increased for the tax years 2024 and 2025. It will be €1,000 per year for individuals and €2,000 per annum for a jointly assessed couple (married or civil partners).

 

  • The Sea-going Naval Personnel Tax Credit has been extended for five years to 31st December 2029.

 

 

 

Other Personal Tax Reliefs

 

  • Mortgage Interest Relief has been extended. There has been no change to the qualifying criteria.  Homeowners must have an outstanding mortgage balance on their principal private residence of between €80,000 and €500,000 as of 31st December 2022. Qualifying homeowners will be eligible for this tax relief in respect of the increased interest paid on their mortgage in 2024 as compared with 2022. Tax Relief is at the standard Income Tax rate of 20%.  The Tax Credit is capped at €1,250 per property.  To claim Mortgage Interest Relief, the taxpayer must file a Tax Return and the taxpayer must be compliant with Local Property Tax (LPT) requirements.

 

  • The Help to Buy Scheme has been extended for a further four years at the current rates until the end of 2029.

 

  • Pre-Letting Expenses Relief. The current tax relief, capped at €10,000 per premises, for certain pre-letting expenditure will be extended for a further three years to 31st December 2027.  Section 97A TCA ‘97, which deals with rental expenses, provides that certain expenses incurred on a vacant residential property before its first letting following a period of non-occupancy are allowable as a deduction against rental income from that specific premises.

 

  • Various farming related Tax Reliefs have been extended until 31st December 2027 including (a) Enhanced Stock Relief for Registered Farm Partnerships, (b) Stock Relief for Young Trained Farmers as well as (c) General Stock Relief.

 

  • Budget 2025 introduced a BIK exemption for home car chargers provided by employers. It provides for an exemption from Benefit-in-Kind where it is the employer who incurs the cost of providing a facility for electric charging of vehicles at the home of an employee or director.

 

  • The proposed tapering of Benefit-in-Kind Relief for electric vehicles has been deferred. The universal relief of €10,000 which applied to the Original Market Value of a vehicle in Category A – D is being extended to 31st December 2025.  The amendment to the lower limit of the highest mileage band has also been extended until 31st December 2025.   Therefore, the highest mileage band is entered into at 48,001km.

 

 

 

Small benefit exemption

 

  • There will be an increase in the annual limit of the small benefit exemption from €1,000 to €1,500.

 

  • It has also been amended to allow five non-cash benefits, up from two, to be granted by an employer in a single year. The cumulative total of the first five benefits in a calendar year cannot exceed €1,500.

 

  • From 1st January 2024 an employer is required to return details of all qualifying incentives provided to employees where the small benefit exemption applies.

 

  • This benefit can be given to any employee of the company, including directors and shareholders, providing they are on the payroll.

 

 

 

Universal Social Charge

 

Various amendments to the USC system were introduced in Budget 2025.

 

  • The 4% rate of USC will be reduced to 3%.

 

  • The 2% USC rate band will increase by €1,622, from €25,760 to €27,382.

 

 

From 1st January 2025, the USC Rates and Bands will be:

 

  • €0 – €12,012 – 0.5%

 

  • €12,013 – €27,382 – 2%

 

  • €27,383 – €70,044 – 3%

 

  • Balance – 8%

 

 

Self-employed income over €100,000 will be liable to a 3% surcharge i.e. 11%

 

 

 

 

PRSI

 

  • All classes of PRSI will increase by 0.1% percentage point from 1st October 2024.

 

  • From 1st October 2024 the minimum annual PRSI contribution is €650.

 

  • There will be a further 0.1 percentage point in October 2025. From 1st October 2025, (i) the employee PRSI rate will increase from 4.1% to 4.2%, (ii) the employer PRSI rate will increase from 11.15% to 11.25% and (iii) the rate will rise from 8.9% to 9% in situations where the weekly income is €496 or less.

 

  • From 1st October 2025, the self employed PRSI rate will increase from 4.1% to 4.2%.

 

 

 

 

For full information on Budget 2025, please click https://www.gov.ie/en/publication/e8315-budget-2025/

 

 

 

 

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.