Tax Relief Ireland

Tax Credits. Budget 2026 Ireland. Income Tax. Personal Taxes. Tax Reliefs

Budget 2026 introduced a wide range of updates across Ireland’s tax system. The following Tax Credits and Reliefs are being extended:

1. The Rent Tax Credit is being extended for a further three years.  It is due to expire at the end of 2028.

For further information, please click link: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-credit/index.aspx

2. The income tax deduction for landlords retrofitting properties is extended for another three years.  It is available for works carried out up to 31st December 2028.

For further information, please click link: https://www.revenue.ie/en/property/rental-income/deduction-for-retrofitting-expenditure/index.aspx

3. The Income Tax Exemption for households which sell electricity from micro-generation back to the grid is extended for a further three years to 31st December 2028.

For further information, please click link: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-44.pdf

4. The Mortgage Interest Tax Relief is being extended for a further two years. Relief will be available at the standard Income Tax rate, with the maximum 2025 relief capped at €1,250 per property and €625 per property for 2026.

For further information, please click link: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/mortgage/index.aspx

5. The USC Concession for medical card holders will be extended until 31st December 2027.

For further information, please click link: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

6. The €5,000 Vehicle Registration Tax (VRT) Relief for new electric vehicles is extended until 31st December 2026.

For further information, please click link: https://www.gov.ie/en/department-of-finance/speeches/statement-by-minister-donohoe-on-budget-2026/

7. Employee Benefit-in-Kind Relief for employer provided vehicles (for cars in categories A-D and to all vans) is to be extended, on a tapered basis, until the end of 2028.

For further information, please click link: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

8. Special Assignee Relief Programme (SARP) has been extended by 5 years to 2030.

For further information, please click link: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

9. Key Employee Engagement Programme (KEEP) has been extended to 31st December 2028 subject to approval from the European Commission.

For further information, please click link: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

10.Foreign Earnings Deduction (FED) has been extended by 5 years to 2030.

For further information, please click link: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

Accounts Advice Centre provides a top tier level service for all personal income tax matters, from filing tax returns to offering specialist advice on complex taxation issues. We have over thirty years experience providing expert tax advice, tailored for individuals and their families. For a full professional taxation advice and compliance service, 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.

Gift and Inheritance Tax Ireland. Capital Acquisitions Tax. Dwelling House Relief. Dwelling House Exemption.

In general terms, Capital Acquisitions Tax is the Irish gift or inheritance tax arising on a benefit taken by or from an Irish resident individual. It also applies if a gift or inheritance includes Irish property, regardless of the residence of the person, either taking or giving the benefit.   It’s important to bear in mind that Capital Acquisitions Tax or CAT is paid by the beneficiary.  No CAT arises between spouses or civil partners.

Today, Revenue updated their guidance material on exemptions relating to dwellings in the form of a fourteen page document.  For full information, please click links:

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/dwelling-house/index.aspx

https://www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-manual/part-09-exemptions/section-86-exemption-relating-to-certain-dwellings.pdf

As you’re aware, the rules differ for gifts and inheritances.  For example, under the Dwelling House Relief, an individual can inherit a property tax free, provided that person:

1. has been living in the property for a minimum of three years prior to the date of inheritance,

2. does not own or have an interest in another residential property at the date of the inheritance,

3. continues to occupy the property as their main residence for six years from the date of the inheritance, unless the beneficiary is aged sixty five years or more at the date of inheritance.

Other points to consider are:

• the dwelling house must have been occupied by the disponer (i.e. the person giving the property) as their only or main residence at the date of their death.

• Relief is not available if the beneficiary holds a beneficial interest in another dwelling at the date of inheritance.

• The Dwelling House Exemption will not be available if the same beneficiary acquires an interest in another dwelling house from the same disponer, after the “date of inheritance” and right up to the date the estate is distributed.

For gifts of a dwelling house, however, the exemption requirements are different.  From 25^th December 2016 onwards, the exemption no longer applies to gifts of dwelling houses, unless the gift is made to a “dependent relative” of the donor.  This effectively means that a gift of a dwelling house given to a dependent relative of a donor will be exempt provided the recipient of the gift is either (a) permanently and totally incapacitated from maintaining themself due to a physical or mental infirmity or (b) is aged at least 65 years. It’s important to keep in mind that for such gifts to qualify for the tax exemption, the donor does not need to live in the property as their principal residence.  In addition to the above requirements, the following qualifying conditions for a gift apply:

You will be exempt from Capital Acquisitions Tax  on receipt of a gift of a dwelling house if, at the date of the gift:

1. the dwelling house was your main home for the previous three years,

2. you do not own or have an interest in any other dwelling house, and

3. the dwelling house continues to be your only/main home for at least six years from the date of the gift, unless you are aged at least 65 years at the date of the gift or are required to live elsewhere because of a mental or physical infirmity.  This must be certified by a medical doctor.

For completeness, the term “relative” is defined as a lineal ancestor, lineal descendant, brother, sister, uncle, aunt, niece/nephew of the giver or the spouse/civil partner of the giver.

Accounts Advice Centre provides a full and comprehensive tax advisory and compliance service.  If you require specialist inheritance or gift tax advice, 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.

Income Tax Return Deadline. ROS Pay and file. Form 11 Personal Tax Returns

Revenue eBrief No. 156/25 was published on 7th August 2025.

Tax and Duty Manual Part 38-06-01a has been updated to contain the following:

• A link to access further information on Revenue’s new agent eLinking facility is provided in paragraph 6.5.1.
• Paragraph 7.1.2 states that payments via Commercial Debit Cards will no longer be accepted from 1st September 2025.
• Paragraph 8.8 provides some information as well as a link to access further details ion the Residential Premises Rental Income Relief (RPRIR).
• Paragraph 8.9 provides information as well as a link to further details is provided on the Retrofitting Rental Properties Relief (RRPR).

If an individual was tax compliant as at 31st December 2024, they can claim the RPRIR for 2024 provided:

• the individual holds a Tax Clearance Certificate at the time their 2024 income tax return is filed and
• the other conditions required to claim the relief are satisfied.

For further information, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-38/38-06-01a.pdf

If you require assistance filing your Form 11 Income Tax Return, 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.

Filing Tax Returns. Income Tax. Personal Taxes. Self assessment. Sole Traders. Company Directors

The Income Tax Return filing deadline is 31st October 2024.  That deadline date is extended to 14^th November 2024 provided you file both (a) your Income Tax Return and (b) your Income Tax Balance due for 2023 plus your 2024 Preliminary Tax.

When preparing your 2023 Income Tax Return, here are some Tax Reliefs you may not have considered before:

Childminders Tax Relief Scheme

You could be entitled to the Childminder’s Tax Relief if:

• You mind three or fewer children in your own home at any one time and

• You earn no more than €15,000 per annum.

• You must have informed the HSE that you will be providing such services in your own home.

• You must be registered as self employed and registered under self assessment.

No tax will be payable on the childminding earnings received, provided the amount is not more than €15,000 per annum.

As you cannot deduct any expenses, there is no requirement to maintain and keep detailed accounts.

If another person provides childcare services with you in your home, the €15,000 income limit is divided between you.

Despite the fact that you may have no Income Tax liability, you are obliged to file a Form 11 Tax Return by 31^st October 2024 or 14^th November 2024, whichever is relevant to you.

If, however, the childminding income exceeds the €15,000 annual threshold, the total amount will be taxed as normal under the self-assessment rules.

For further details, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-29.pdf

Irish rent tax credit

The Rent Tax Credit was introduced in Budget 2023 which is available for the tax years 2022 to 2025 inclusive.

In Budget 2024, the Rent Tax Credit was increased by €250.

When completing your 2023 Form 11 Tax Return the rent tax credit is worth a maximum of €500 per year from 2023 for a single individual and €1,000 for a married couple.

The rent tax credit is calculated as 20% of the rent paid in the year and is capped at €500 for a single person or €1,000 for a couple who are jointly assessed to tax.

When calculating your 2024 Preliminary Tax liability, the rent tax credit increases to €750 for a single individual and €1,500 for a married couple.

Please be aware that the claim must relate to rental payments which both (a) fell due and (b) were actually paid during the tax year of assessment.

This tax credit will only be available to taxpayers who are not in receipt of any other housing supports.

For further details, please click: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-credit/index.aspx

Training Course Fees

Relief is available for fees between €317 and €1,270 paid in respect of Information Technology and Foreign Language courses which are on Revenue’s list of approved Courses.

To check the eligibility of your course, please click the following links:

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/documents/education/s476-approved-languages-2009-10.pdf

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/documents/education/s476-approved-it-courses-2014.pdf

These courses must be at least two years in duration and must not be a postgraduate course. Instead postgraduate courses in foreign languages or information technology may qualify for tuition fees relief.  For further details, please click the following link: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/index.aspx

This relief applies to fees if you are the student or if you have paid fees on behalf of another person.

For complete information, please click: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/foreign-language-and-it-courses/index.aspx

To get your tax return filed before the income tax deadline, 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.

New Angel Investor Relief – Capital Gains Tax Relief. CGT Expert Advisory Services.

Finance (No. 2) Act 2023 introduced a new Capital Gains Tax relief – “Relief for Investment in Innovative Enterprises” or Angel Investor Relief.  Its objective is to encourage investment in innovative small and medium start-up businesses entities. Please be aware, however, that not all types of angel investments qualify for the new relief. An investment, for the purposes of this Angel Investor Relief will only qualify if it meets certain conditions including that it’s based on a business plan and that the company can provide certificates of qualification issued by the Irish Revenue Commissioners including a certificate of going concern and a certificate of commercial innovation.  It is also important to bear in mind that the  Relief will not be granted if the investor owns the investee company.

This new Capital Gains Tax Relief provides a 16% CGT rate where a qualifying investor makes a qualifying investment in a qualifying company and subsequently disposes of those shares.

This new CGT Relief applies an effective rate of 16% on qualifying gains up to twice the value of their initial investment if the investment is made by an individual or 18% if the investment is made through a partnership.  As you can see both rates are very attractive when compared to the standard 33% rate of Capital Gains Tax.

There is a lifetime limit of €3 million for the Relief.

The Relief, calculated as 33% – 17% for individuals or 33% – 15% for partnerships, is available on the lowest of the following:

1. the chargeable gain,
2. twice the amount of the qualifying investment in the eligible shares disposed of or
3. the €3m lifetime limit less chargeable gains from all claims made under this Relief.

Conditions for Angel Investor Relief

Conditions for the Capital Gains Tax (CGT) Relief include the following:

1. To qualify, the scheme involves a certification process whereby the investee company must obtain a Certificate of Going Concern and a Certificate of Commercial Innovation from the Revenue Commissioners. In addition, the company must be incorporated and tax resident in Ireland, an EEA state or the UK, be an innovative enterprise (i.e. based on a business plan, approved by Enterprise Ireland and demonstrate compliance with GBER), carry on or intend to carry on certain trading activities in Ireland and hold a tax clearance certificate.
2. The company must exist wholly for the purpose of carrying on relevant trading activities or holding shares in certain subsidiaries.
3. The company must not be controlled by another company and must be an unquoted SME.
4. Each company, which is a member of the relief group of which the company is a member, must be unlisted.

The criteria governing certificates of qualification are provided for under s600F TCA 1997.

For the investor, a qualifying investment under the terms of the relief includes:

1. A minimum qualifying investment is €20,000 or
2. An investment in the form of fully paid up newly issued shares in the qualifying company valued at a minimum of €10,000 where the investment represents at least 5% of the company’s ordinary share capital.
3. The investment cannot be for more than 49% of the qualifying company’s ordinary share capital, entitlement to profits available for distribution, voting rights and assets available for distribution.
4. The eligible shares have been held for at least three years from the date of the investment.

For the purposes of this Angel Investor Relief, the investor must not be “connected” with the investee company or any other company within the Relief Group.  In other words, in order to claim this Relief, the investor cannot be a partner, director or employee of the relevant company or have any interest in the share capital of this or any company which is a member of the Relief Group.  The investor must subscribe for shares in the investee company (i) for consideration wholly in cash, (ii) by way of a bargain at arm’s length and (ii) for bona fide commercial reasons.

IMPORTANT POINTS

• An investment will not be a qualifying investment unless it is based on a business plan and the company seeking to raise funds from the investor (i.e. the individual or partnership) must be able to provide a certificate of going concern and a certificate of commercial innovation issued by the Revenue Commissioners.

• Please be aware that the 5% shareholding threshold does not apply in circumstances where the qualifying investment is €20,000 or more.

• Angel Investor Relief is currently applicable in relation to the disposal of eligible shares issued on/before 31^st December 2026.

• New Angel Investor Relief will work with other CGT Reliefs including Retirement Relief and Revised Entrepreneur Relief. This means, priority will be given to either Retirement Relief or Revised Entrepreneur Relief if it provides a higher amount of tax relief to the qualifying investor than Angel Investor Relief. It is not possible, however, to claim Angel Investor Relief in conjunction with Revised Entrepreneur Relief or Retirement Relief.

• It is not possible to avail of Angel Investor Relief as well as E.I.I. in relation to the eligible shares.

For further information as to the criteria which define an “innovative company” please click: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014R0651

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.

Research and Development (R&D) Tax Credit – Corporation Tax

Ireland’s Research and Development (R&D) tax credit system is a valuable tax based incentive, providing major benefits to both multinational companies and SMEs operating in Ireland.  The R&D tax credit was first introduced in the Finance Act 2004 and has been subject to various amendments in the subsequent Finance Acts.  The credit operates by providing up to 25% of R&D expenditure incurred by a company on qualifying R&D activities (both revenue and capital) in a tax credit or in cash (subject to certain conditions being met). This 25% tax credit can be claimed in addition to the normal 12½% revenue deduction available for the R&D expenditure.  Therefore, the total tax benefit to a limited company is 37½% being the 12½% standard corporation tax rate plus the 25% R&D Tax credit.

How can the Credit be used?

Companies are entitled to a credit of 25% of the incremental R&D expenditure incurred for periods commencing on or after 1st January 2015.

The credit can be used to:

• Reduce the company’s corporation tax liability of the current period.  Where the credit exceeds the corporation tax liability for the current year, the excess can be carried forward indefinitely to offset against future corporation tax liabilities or
• Reduce the corporation tax liability of the previous year i.e. the company can make a claim for the excess to be carried back or offset against the preceding period’s corporation tax liability or
• If unused, the credit can be refunded by the tax authorities subject to certain restrictions.  The only restriction in obtaining a cash refund is that the R&D credit refund cannot exceed the PAYE/PRSI remitted by the company to Revenue in the last two years or the corporation tax liability for the prior ten years if higher.

The claim must be made within one year of the end of the accounting period in which the expenditure has been incurred.

Broadly,

It can alternatively be used as a key employee reward mechanism to remunerate R&D staff effectively, tax free subject to certain conditions.  The effective income tax rate for such key employees may be reduced to a minimum of 23%, provided certain conditions are met by the company and the individual.

For further information, please click:  https://www.revenue.ie/en/covid-19-information/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.

Apple State Aid Case. Taxes Ireland. EU Taxes. Irish Branch and Subsidiary

Today, in a statement issued by Vice President Margrethe Vestager, the European Commission confirmed that it will appeal the judgment of the General Court of the European Union in the Apple State aid case to the Court of Justice of the European Union.  On 15th July 2020, the General Court of the European Union found that no State aid had been given by Ireland to Apple and that the Irish branches of Apple had paid the correct amount of tax due under legislation.

Vice President Margrethe Vestager stated that

“the General Court judgment raises important legal issues that are of relevance to the Commission in its application of State aid rules to tax planning cases. The Commission also respectfully considers that in its judgment the General Court has made a number of errors of law. For this reason, the Commission is bringing this matter before the European Court of Justice.”

Ireland had previously appealed the Commission’s Decision on the basis that the correct amount of Irish tax had in fact been paid by Apple and that Ireland had not provided State aid to Apple.  The judgment from the General Court of the European Union vindicates Ireland’s position.

The Minister for Finance, Paschal Donohoe T.D. said,

“I note the decision of the European Commission to lodge an appeal to the CJEU. Ireland has not yet been served with formal notice of the appeal. When it is received, the Government will need to take some time to consider, in detail, the legal grounds set out in the appeal and to consult with the Government’s legal advisors, in responding to this appeal.”

The funds in escrow of €13 billion will only be released when there has been a final determination in the European Courts on the validity of the Commission’s decision.

This appeal process could take up to two years.

For more information, please click: https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_20_1746

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.

Special Assignee Relief Programme (SARP). Income Tax Relief. Employee Tax Relief. Payroll Tax

There have been two updates to SARP legislation in the most recent Finance Act.  The Special Assignee Relief Programme is an Income Tax Relief aimed at employees who move to Ireland with their employer or with an associated company.  By way of background, SARP was first introduced in 2012. Where certain qualifying criteria are met, the assignee or secondee is entitled to a 30% deduction from employment income over €75,000.  Although this is an Income Tax Relief, the exemption does not extend to Universal Social Charge (USC) and PRSI.  SARP be claimed for five consecutive years in two way: (a) through an individual’s annual self assessment Income Tax Return or (b) through the employer’s payroll.

Revenue’s guidance on Special Assignee Relief Programme (SARP) has been updated to take into account the recent changes introduced by Finance Act 2018:

1. Details of the cap of €1 million introduced from 1st January 2019 for the years 2019 (for new entrants only) and 2020 (for all claimants).

A cap has been reintroduced on the amount of the employment income to which SARP relief can apply.

The upper income threshold of €1 million will apply to any relevant employee who first arrives in Ireland on or after 1st January 2019.

For the tax year 2020, the upper income threshold will apply to all relevant employees.

2. Clarification regarding the requirement to file Form SARP 1A within the 90 day time limit

From 1st January 2019 the time limit for the submission of the form SARP 1A will be extended from within 30 days of the date the employee first arrives in Ireland to carry out his/her employment duties to 90 days.

For further information, please click on the following link:

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/income-and-employment/special-assignee-relief-programme/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.

Retirement, Redundancy and Termination Payments. Income Tax. Employer Taxes. Payroll

If you are facing retirement or redundancy (termination of employment), it is important to understand the Income Tax treatment of your severance package. The following attract beneficial tax treatment through your employer’s payroll:

1. Statutory redundancy payments

2. Ex-gratia Termination payments

3. Pension lump sums

Statutory redundancy payments

Statutory redundancy payments are tax exempt.  They are based on two weeks’ pay for every year of service plus one additional week’s pay with maximum weekly earnings capped at €600 per week.  Income in excess of €31,200 is ignored when calculating Statutory redundancy payments.

Ex-gratia termination payment

Lump sum payments paid by an employer on retirement or redundancy may be taxable.

All or part of the ex gratia termination payment may qualify for tax relief.

The termination payment tax reliefs are not available, however, to any payments made to an employee under the terms of their employment contract. In other words, any contractual payments made by the company to its employee are treated in the same way as a salary payment.

Only complete years are counted for purposes of the reliefs i.e. part of a year cannot be taken into account for the purposes of the calculation.

There are three types of tax reliefs available:

1. Basic Exemption – This exemption is calculated as €10,160 plus €765 for each complete year of service.

2. Increased Basic Exemption – The Basic exemption may be increased by a further €10,000 less the current actuarial value of any tax free pension lump sum receivable now or in the future from the company/occupational pension scheme. This relief is available provided the employee hasn’t claimed an exemption in excess of the Basic Exemption within the previous ten years.

3. Standard Capital Superannuation Benefit (SCSB) relief – This Relief is based on the employees’ average annual remuneration for the last 36 months up to the date of termination.

The tax free amount is calculated as follows:

(A × B) − C

15

where

A = the average remuneration for the last 36 months of service up to the date of termination.  The value of any taxable benefits can be included in the figure for emoluments.

B = The number of complete years of service.

C = Any tax free lump sum received or receivable under the employer/occupational pension scheme.

There is a lifetime cap of €200,000 on the tax-free amount of a termination payment an employee is entitled to receive.

The amount of the termination payment in excess of the relevant exemption/relief is liable to Income Tax and Universal Social Charge at the employee’s marginal rates.

There is no employee and employer’s PRSI payable on a termination payment.

Before making any decision, please keep in mind that claiming either (i) the Increased Basic Exemption or (ii) the SCSB Relief can affect an employee’s ability to receive a tax-free lump sum from their employer pension scheme on retirement.

Pension Lump Sums

When you retire, you can opt to take a tax-free retirement lump sum which is capped at €200,000 under current legislation.

The amount between €200,001 and €500,000 is taxable at the standard rate of tax being 20%

Any amount over €500,000 is taxed under the Pay As You Earn system at the taxpayer’s marginal tax rate of 40%.

For further information on Termination Payments, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-05-19.pdf

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.

UK Taxes. UK Capital Gains Tax (CGT). Full Cross Border and Expat Tax Services. UK CGT Reliefs

Current UK Legislation

Principal Private Residence Relief (PPR) is a capital gains tax relief on the disposal of an individual’s only or main residence.  Under current U.K. legislation, an individual can claim relief for any period where the relevant property is deemed to be the individual’s “Principal Private Residence” (PPR).  The individual can claim Principal Private Residence relief for the final eighteen months of ownership providing the property had been that individual’s principal or main residence at any point during his or her ownership.  In other words, the final eighteen months always qualify for Principal Private Residence Relief even if the dwelling was no longer the individual’s only or main residence.  Lettings relief currently provides relief of up to £40,000 to individuals who let out a property which is or has been their main or principal residence.

Budget 2018 Amendments

The government proposes to make the following two changes with effect from April 2020:

1)      The Lettings Relief will be reformed so that it only applies where the owner of the property is in “shared-occupancy” with a tenant.  The relief can reduce the capital gain, per person, by up to £40,000, giving a potential tax saving of up to £11,200 (£40,000 x 28%) and

2)      The final period of exemption, which applies if a property has been an individual’s PPR at any point during their period of ownership, will be reduced from eighteen months to nine months.   There are no proposed amendments to the thirty six months that are available to disabled persons or those residing in a care home.

The government will consult on the proposed changes before legislating.

For further information, please click:  https://www.gov.uk/government/publications/private-residence-relief-budget-2018-brief

As Cross Border Tax Advisors, we provide a full and comprehensive UK tax advisory and compliance service including liaising with HMRC on your behalf.  For further information, please contact us through 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.