The deduction available for mortgage interest relief against rental income from residential properties is reduced from 100% to 75% with effect from midnight on 7 April 2009.

First Time Buyers

First Time Buyers who are within the first seven years of their mortgage will continue to get the relief automatically until the end of the 7th year of their mortgage.

Non First Time Buyers

With effect from May 01, 2009,  the Revenue said is working closely with the relevant lenders to identify these accounts and the amount of loan in respect of which TRS (tax relief at source) is payable under the new rules. Where Revenue is in a position to decide with certainty from the information provided by the lender that an account holder is entitled to TRS then this account will be reactivated for TRS by Revenue.

In the case of non First Time Buyer accounts where it is not clear that they are entitled to TRS, and for whom insufficient information is available to determine entitlement Revenue will write to the account holder during the month of May requesting the necessary information.

TRS for Non First Time Buyers who are clearly no longer eligible for TRS, is not payable from 1st May.

A qualifying loan for the purpose of mortgage TRS is a secured loan, used to purchase, repair, develop or improve your sole or main residence, situated in  the State. With effect from 1st May 2009 the number of tax years in respect of which mortgage interest relief may be claimed is 7 years for first time and non first time buyers. You can claim mortgage tax relief in respect of the interest charged/paid on your main residence. You can also claim mortgage tax relief in respect of a mortgage paid by you for your separated/divorced spouse, and a dependent relative (i.e. widowed parent, elderly relative) for whom you are claiming a dependent relative tax credit. However, your mortgage TRS entitlement cannot exceed the maximum TRS allowance.

Switching lender or mortgage type to achieve a better interest rate does not equate to a new loan. However, moving home and taking out a new mortgage for this home with a new or existing lender is eligible for relief for 7 years from the date of first payment on the new home loan.

Revenue information

Tax Credit on Trade Union Subscriptions

Rent-a-Room Relief (private residence)

Private Use of Employer Van

The charge to BIK for the private use of an employer’s van is calculated at 5% of the ‘original market value’ of the van with effect from 1 January 2004.

From 1 January 2004 employers are obliged to operate PAYE on non cash benefits provided to employees. These benefits are also liable to PRSI and Health Levy.

The main areas of benefit involved are as follows:

• Company cars.

• Company loans.

• Tax paid vouchers.

• Expense payments on behalf of employees/directors.

An employer can provide an employee with a small benefit to a value not exceeding €250 without applying PAYE and PRSI to that benefit.

Deposit interest retention tax (DIRT) is increased from 23% to 25% on standard deposit accounts and from 26% to 28% on certain savings accounts, life assurance policies and investment funds, with effect from midnight on 7th April 2009

Contribution
Rate

Earnings
Ceiling 2008 €

Earnings
Ceiling 2009 €

10.75% ⁽¹⁾

No Ceiling

No Ceiling

(First €127 of weekly earnings exempt)

4%⁽²⁾⁽³⁾

50,700

    4% ⁽⁴⁾⁽⁵⁾

No Ceiling

75,036

5%

75,036+

As from 1 January 2009, the employee weekly threshold for liability to PRSI is €352.

   3%⁽⁶⁾

No Ceiling

    2% ⁽⁴⁾⁽⁵⁾

No Ceiling

5%

Preliminary tax of at least 90% of the liability for the period or 100% of previous year’s liability is due one month (by the 21st day of that month) before the end of the accounting period.

New or start up companies with a Corporation Tax liability of less than €200,000 in their first accounting period will not be required to pay Preliminary Corporation tax. The liability is paid when the return is filed.

Other Companies
Preliminary Tax for an accounting period commencing before 14th October 2008 of at least 90% of the liability for the period is due one month (by the 21st day of that month) before the end of the accounting period.

In respect of accounting periods commencing after 14th October 2008 preliminary tax is due in two installments.

The first installment will be payable in the sixth month of the accounting period (by the 21st day of that month) and the amount payable will be 50% of corporation tax liability in the preceding accounting period of 45% of corporation tax liability for the current accounting period.

The second installment will be payable in the eleventh month (by the 21st day of that month) of the accounting period and the amount payable will bring the total preliminary tax paid to 90% of the corporation tax liability for the current accounting period.

The final balance is payable at the Return filing date i.e. 21st day of the ninth month following the end of the accounting period.

Start-Up Companies
New start-up companies which commence trading in 2009 will be exempt from tax, including capital gains, in each of the first three years to the extent that their tax liability in the year does not exceed €40,000.

The payment date for preliminary tax, which must be at least 90% of the final liability, has been brought forward, to one month before the end of the accounting period. Preliminary tax is based on the current year’s liability. However, small companies can base the preliminary tax payment on the previous year’s liability. 

This new relief along with the increase in the Tax Credit for expenditure on Research nd Development from 20% to 25% announced in December 2008, is focused on making Ireland a more attractive destination for companies to locate and develop intellectual property

There is a cap of €150,000 for 2009 (€275,239 for 2008) on the amount of earnings on which tax relief may be obtained for contributions by individuals to Retirement Annuity Contracts and Personal Retirement Savings Account. This cap also applies for employee contributions to occupational pensions schemes.

There is a cap on the allowable pension fund limit of €5,418,085 or, if higher, the value of the fund on the 7 December 2005.

(90% of turnover must be from the sale goods for this threshold to apply)

 €75,000 ( €70,000 up to 1 May 2008)

 €37,500 ( €35,500 up to 1 May 2008)

21.5%

This standard rate applies to all supplies not chargeable at other rates.

13½%

Heating fuel, electricity, restaurant services, newspapers, hotel and B&B lettings, property and Child Car Seats (with effect from 1 May 2007, please see below)

0%

20% for gifts and inheritances

25% for gifts and inheritances

Annual gift exemption €3,000 per individual. The base date for aggregation is 5 December 1991.

Consideration