BUDGET 2011
Download the 2011 tax table here (93kb PDFf)
PERSONAL TAX
Personal tax credits and bands
All of the personal tax credits were reduced by the Minister in his budget speech by circa 10% (see table). The personal tax bands were also reduced, effectively increasing the amount of income taxable at the marginal rate for most taxpayers.
Universal Social Charge
The introduction of the new universal social charge sees the abolition of the income levy and the health levy. PRSI will be included at a future date. The legislation governing the new charge will be broadly in line with the income levy legislation. Social welfare payments will be exempt from the universal social charge.
PRSI
The PRSI ceiling for employees has been removed and PRSI rate for the self-employed, higher earning public servants and certain office holders has increased to 4%. Share schemes and employee pension contributions are no longer exempt from PRSI.
Abolition of reliefs
Patent royalty exemption
With effect from 24 November 2010, the tax exemption for patent royalties or dividends paid out of patent royalties has been removed.
Tax relief on loans to acquire an interest in certain companies
The relief currently available for the interest on loans taken out to acquire an interest in certain companies will be phased out :
- 2011 - 75% relief;
- 2013 - 25% relief;
- and
- 2012 - 50% relief 2014 and subsequent tax years - no relief.
This relief has been abolished with effect from 7 December 2010 for new loans.
Approved share option schemes and relief for new shares purchased by employees
The income tax and income levy exemption applicable to approved share option schemes was abolished under the National Recovery Plan. This has been given a legislative basis in today's budget, effective from 24 November 2010. The budget has withdrawn the tax relief for new shares purchased by employees in their employer company.
Other reliefs
The following reliefs are to be abolished with effect from 1 January 2011, unless otherwise stated:
- rent relief: to be phased out over same timeframe as mortgage interest relief;
- trade union subscriptions;
- for farmers who incur capital expenditure on farm buildings and structures for use in control of pollution;
- tax exemption from BIK on employer provided childcare;
- tax relief on subscriptions paid to professional bodies;
- capital expenditure on new machinery and plant for use in mining; and
- exemption from Tax in respect of grants or payments to the National Co-Operative Farm Relief Services Ltd.
Termination payments
A lifetime limit of €200,000 will apply to ex-gratia payments made in connection with the termination of an office or employment from 1 January 2011. The tax free exemptions currently available in respect of termination payments can still be availed of where the tax free amount is less than €200,000. The lifetime limit for termination payments is a separate limit to that provided for pension lump sums
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