Employees in receipt of share options will no longer be left to sort out any tax due on their own as a result of the Finance Bill. The Department of Finance has decided to move the onus for addressing tax liability for any capital gain on to the employer rather than the individual, with tax to be deducted through the PAYE system from January of next year.
The sale of Irish shares in the US and Canada will now be exempt from stamp duty, which is generally charged at 1 per cent on share transactions. The measure will remove one element of increased costs for many small Irish shareholders in companies such as CRH, Flutter and Smurfit Kappa, which either already have or intend to move their main listing to the US.
The Department of Finance said the move would “put an administrative practice of the Revenue Commissioners on a statutory footing”.
It is tightening up the rules on interest-free or reduced interest loans. Anyone in receipt of such a loan will now have to file a capital acquisitions tax return with the Revenue Commissioners in any year when the outstanding balance on the loan at any time was in excess of €335,000 – a figure that matches the tax-free ceiling for assets passing from parents to a child.
Budget 2025 main points: Energy credits, bonus welfare payments, higher minimum wage and tax changes
Budget 2025 calculator: How this year’s budget will affect your income
VAT cuts for restaurants were a bad idea last month. Why are they a good idea now?
Got a mortgage? There is up to €2,500 in tax relief waiting for you
The wording of the Finance Bill measure seems particularly focused on intra-family loans.
[ New 15% tax rate for big multinationals forms cornerstone of Finance BillOpens in new window ]
Finance (No2) Bill 2023, whose main function is to provide the legislative underpinning for measures announced in Budget 2024, has also moved to close a pension loophole where holders of approved retirement funds (ARFs) could use the assets in the fund as a loan or security for a loan to themselves or a company to which they are connected without facing a tax charge. Any funds lent or used as security in those circumstances will now be seen as a distribution from the fund and liable to income tax and USC.
Also in the area of pensions the Bill removes the upper age limit of 75 by which time holders of personal retirement savings accounts (PRSAs) must start drawing down their funds. Once passed, people will be able to put off drawing down PRSA finds until they are required, regardless of age, as long as they are at least 60 years old.
Beyond the Bill’s provisions on landlord tax relief, it provides for landlords of properties previously subject to rent controls to be allowed deduct the cost of retrofitting.
Returning to loopholes, the Bill moves to prevent a situation where no tax is paid on interest, royalties, dividend income etc where that money is paid abroad to a zero-tax location or a country on the EU list of non-co-operative jurisdictions.
It also grants income tax exemptions to nursing and midwifery students on clinical placement allowances that they may receive and on maternity support allowance, which is paid to elected women local councillors on maternity leave to cover the cost of hiring someone to cover basic office duties for up to 42 weeks, at up to €240.14 a week.
The Bill also gives Revenue the right to publish lists of charitable and sporting bodies that have been granted income tax exemptions, regardless of provisions in the tax code on the confidentiality of tax affairs.
