Personal

Income Tax

The Minister indicated that personal tax cuts could not be implemented at this time of economic uncertainty because to do so could potentially undermine the sustainability of Ireland's public finances.

Tax Credits 

The Earned Income Tax Credit, introduced for self-employed taxpayers in 2016, will increase from €1,350 to €1,500 with effect from 1 January 2020.

The Home Carer Tax Credit will increase from €1,500 to €1,600 with effect from 1 January 2020.

Health and Dental Care

The Minister announced the Government's intention to extend free GP care to children under 8 and free dental care for children under 6.

Universal Social Charge (USC)

The reduced rate USC for medical card holders is being extended for a further year.

Special Assignee Relief Programme (SARP)

SARP, which provides income tax relief for certain assignees to Ireland, has been extended until 31 December 2022.

Foreign Earnings Deduction (FED)

FED, which provides income tax relief for individuals who temporarily carry out duties of their office or employment in certain specified countries, has been extended until 31 December 2022.

Dividend Withholding Tax (DWT)

The rate of DWT is set to increase from 20% to 25% with effect from 1 January 2020. The Minister also announced that a modified DWT regime is being proposed from 1 January 2021.  The modified regime will use real-time data collected under the modernised PAYE system to allow for a personalised DWT rate to apply to each individual taxpayer based on the actual rate of tax applicable to them.

Capital Gains Tax – Entrepreneur Relief

No changes were announced but the Minister advised that potential changes to the relief to better support entrepreneurs and entrepreneurial activity will be considered by the Department of Finance.

Capital Acquisitions Tax (CAT) 

The CAT Group A tax-free threshold, that broadly applies to gifts and inheritances from a parent to a child, is being increased from €320,000 to €335,000. This increased threshold applies to gifts or inheritances received on or after 9 October 2019.

 

For further information on Budget 2020, please contact Brian Duffy or your usual William Fry Tax contact.