BUDGET 2016

Budget 2016

Minister of Finance Michael Noonan announced Budget 2016 on 13th October 2015.

Income Tax

  • No change to the tax rates, tax bands or exemption limits.
  • A Earned Income Tax Credit has been introduced for the self employed and proprietary directors of €550.
  • Home Carer tax credit has been increased from €810 to €1,000 and the amount of allowable income that an home carer can earn has increased from €5,080 to €7,200.
  • Home Renovation Incentive is extended for one more year to 31st December 2016.
  • Succession Farm Partnerships – Where an established farmer wishes to pass his or her farm to the next generation of young trained farmers they can form a Succession Farm Partnership. This requires that ownership of 80% of the land is passed to the next generation within ten years. A tax credit of €5,000 to be split in the ratio of the profit share is available. (Subject to EU State Aid approval).

Universal Social Charge thresholds(USC)

  • The exemption limit has been increased to €13,000
  • Income up to €12,012                              1%                            (2015 1.5%)
  • Income from €12,012-€18,668              3%                            (2015 3.5%)
  • Income from €18,668-€70,044            5.5%                          (2015 7%)
  • Income above €70,044                             8%                            (2015 8%)
  • The surcharge of 3% on individuals who have non PAYE income that exceeds €100,000 remains unchanged.

PRSI

  • The lower 8.5% Class A rate of employer PRSI will now apply to weekly earnings up to €376 (up from €356).
  • A tapered PRSI Credit is being introduced for employees insured at Class A whose earnings are between €352.01 and €424 in a week.

Corporation Tax

  • The 3 year relief for start up Companies is been continued for another three years

Capital Gains Tax

  • Gains on disposals of business assets made on or after 1 January 2016 will be charged at a reduced rate of 20% up to an overall limit of €1 million.

Capital Aquisitions tax

  • Group A threshold (gifts and inheritances from parents to their children) has been increased from €225,000 to €280,000 from 14th October 2015.

Agri-Taxation

  • General Stock Relief, Stock Relief for Young Trained Farmers,Stock Relief for Registered Farm Partnerships and the Stamp Duty Exemption for Young Trained Farmers are being extended until 31 December 2018.