Personal

Income Tax

There is an increase in the standard rate band of €750 for all income earners.  For single individuals the standard rate band will increase from €34,550 to €35,300.  For married one-earner couples the standard rate band will increase from €43,550 to €44,300.

Universal Social Charge (USC) 

There is an increase in the rate bands for USC with effect from 1 January 2019.  The 2% rate will now apply to income between €12,012 to €19,874. The 4.75% rate will reduce to 4.5% and will apply to income between €19,874 to €70,044. 

PAYE

PAYE income in excess of €70,044 will be subject to USC at 8% and self-employed income in excess of €100,000 continues to be subject to USC at 11%.

Tax Credits 

The Earned Income Credit introduced for self-employed taxpayers in 2016 will increase from €1,150 to €1,350 with effect from 1 January 2019.

The Home Carer Tax Credit will increase from €1,200 to €1,500 with effect from 1 January 2019.

Employer's PRSI

The weekly income threshold for the higher rate of employer's PRSI will increase from €376 to €386 from 1 January 2019. 

Small and Medium-sized Enterprises (SMEs) Key Employee Engagement Programme (KEEP)

The KEEP was introduced in 2018 to incentivise, attract and retain key employees in certain unquoted SME companies, allowing for CGT treatment on the exercise of share options (in place of income tax treatment). The scheme applies to share options granted between 1 January 2018 and 31 December 2023. 

Changes will be introduced to the restrictions on the total market value of shares subject to qualifying options which may be granted to an individual. Currently the scheme provides that the total market value of all shares subject to qualifying options granted to an individual may not exceed:

  • €100,000 in any tax year;
  • €250,000 in any three consecutive tax years; or
  • 50% of the individual's annual pay in the tax year in which the option is granted.

The salary threshold will increase from 50% of an employee's emoluments to 100%. The three-year limit will be replaced with a lifetime limit and the overall value of share options that may be granted under the scheme will be increased from €250,000 to €300,000. 

Employment and Investment Incentive Scheme

The Employment and Investment Incentive Scheme (EIIS) is a tax relief used by trading companies to attract equity-based risk finance from individuals.

Having reviewed the EIIS, the Minister announced that he will bring forward a package of measures in the Finance Bill to address the main problems identified and to increase its efficiency and effectiveness.

Interest Relief for Rental Property

A full interest deduction will be available for landlords in respect of loans taken out to purchase, improve or repair a residential property from 1 January 2019.

Capital Acquisitions Tax (CAT) 

The current Group A tax-free threshold for CAT, which applies to gifts and inheritances from a parent to a child, is being increased from €310,000 to €320,000 with effect from 10 October 2018. 

For further information on Budget 2019, please contact Brian Duffy or your usual William Fry Tax contact.