Ex-gratia Payments

• Ex-gratia payments received on termination of employment – any amount in excess of €200,000 will now be subject to income tax at the marginal rate

Pensions

• The tax-free pension lumpsum will be capped at €200,000. Any excess above this will be taxed at the standard rate of 20% up to €575,000 and at the marginal rate thereafter
• Employee contributions to Occupational Pension Schemes will no longer qualify for relief from PRSI and will also be subject to the new Universal Social Charge.
• They will also be subject to Employers’ PRSI, although only at 50% of the prevailing rates
• The annual earnings limit in respect of which employee contributions qualify for tax relief is being reduced from €150,000 to €115,000
• The maximum value of a pension fund on retirement for tax purposes is being reduced from €5,418,085 to €2.3m
• The annual imputed distribution applying to the value of assets in an ARF is being increased from 3% to 5%. This deemed distribution, even if not taken is taxed at 41%

Property

• With effect from 2011 S. 23 type relief can only be offset against income from the S. 23 property itself
• At the end of the 10-year minimum holding period you will lose any unused S. 23 relief
• If a S. 23 property is sold within the 10-year period the vendor is still subject to a full clawback of any relief claimed; the purchaser however will no longer be entitled to claim the relief
• Capital Allowances on certain schemes, e.g. hotels and hospitals may no longer be carried forward beyond the period over which the allowances are claimed
• Where the period of the allowances is greater than 13 years the allowances will be reduced by 20% and claimed over a 7-year period
• From 2011 capital allowances may only be offset against income from the property which gave rise to them
• From 2014 any unclaimed or unused capital allowances and unused S. 23 relief will be lost

Stamp Duty

• New Stamp Duty regime for residential property
• Properties valued at up to €1m will be liable to Stamp Duty of 1%.
• Properties valued at more than €1m will be liable to Stamp Duty of 2%
• However all residential property Stamp Duty reliefs – e.g. First-time Buyers’ Relief, New Dwelling house Exemption, Consanguinity Relief on residential property -  are being abolished

Capital Acquisitions Tax (CAT)

• Tax-free Thresholds are being reduced by 20% with effect from today.
• Therefore for example the Class I (Parent to Child) Threshold is reduced €414,799 to €331,839