Changes to the Capital Taxes rates were made, along with miscellaneous changes to some other taxes and allowances
STAMP DUTY
Stamp Duty "Trade-in" scheme
This measure involves the establishment of a Stamp Duty "trade-in" scheme, under which no stamp duty is payable by a person who accepts a traded-in property in exchange or part exchange for a new house/apartment.
Stamp Duty will apply when the person subsequently sells on the 'swapped'/traded-in property.
The measure is being introduced to address the overhang of unsold properties.
Full details of this initiative will be contained in the forthcoming Finance Bill and it is envisaged that the scheme will apply from the date of publication of the Finance Bill to 31 December 2010.
Life Assurance Policies
A new levy on life assurance is being introduced at the rate of 1% on premiums. This new levy will apply to premiums received by an insurer on or after 1 June 2009.
Non-Life Insurance Policies - Change in Rate of Tax
The current non-life insurance levy of 2% is being increased by 1%. The new rate of 3% will apply to renewals and offers of insurance issued by an insurer on and from midnight on 7 April 2009 where premiums are received by the insurer on or after 1 June 2009.
CAPITAL GAINS TAX
The capital gains tax rate is being increased from 22% to 25% in respect of disposals made from midnight on 7 April 2009.
CAPITAL ACQUISITIONS TAX
Rate
The capital acquisitions tax rate is being increased from 22% to 25% in respect of gifts or inheritances made from midnight on 7 April 2009.
Threshold
The current thresholds of €542,544 (Group A: parents to child), €54,254 (Group B: between related persons), and €27,127 (Group C: between non-related persons) are being reduced by 20% to €434,000, €43,400 and €21,700 respectively.
This reduction applies in respect of gifts or inheritances taken from midnight on 7 April 2009.
CAPITAL GAINS TAX, INCOME TAX AND CORPORATION TAX
Income and losses from dealing in residential development land
(a) The special 20% rate applied to the trading profits from dealing in or developing residential development land is being abolished. The income will be charged at the person's relevant marginal rates of income tax or the 25% rate of corporation tax.
This change will apply as regards Income Tax for the year of assessment 2009 and subsequent years and as regards Corporation Tax for accounting periods ending on or after 1 January 2009 (with accounting periods straddling that date being deemed for this purpose to be separate accounting periods).
(b) Where trading losses have been incurred from dealing in or developing residential development land in circumstances where, if trading profits had been made, they would have been eligible to be taxed at 20%, and a claim to use those losses has not been made to and received by the Revenue Commissioners before 7 April 2009, the losses from today will generally only be relievable (on a value basis) up to a maximum of 20%. Where any such loss is a terminal loss, the restriction will be implemented by "ring-fencing" the loss.
Full details of both changes will be contained in the Finance Bill.
CAPITAL ALLOWANCES
A scheme of tax relief for the acquisition of intangible assets, including Intellectual Property is being introduced as a means of supporting the Smart Economy.
The details of the scheme are being worked on, and will be published in the Finance Bill. It is anticipated that this measure will help to attract high quality employment to this economy.
Property-related accelerated capital allowance schemes in the Health Sector are being terminated. This scheme covers private hospitals, registered nursing homes, convalescent homes and associated residential units as well as mental health centres. Transitional arrangements will be put in place for projects that are at an advanced stage of development. The Finance Bill will contain further details on this measure. It should be noted that schemes for palliative care units and childcare facilities will remain in place.
EXCISES
- Auto-diesel will be increased by 5 cent per litre with effect from midnight on 7 April 2009.
- A packet of 20 cigarettes will be increased by 25 cent from midnight on 7 April 2009.
- VAT
Introduction of VAT Margin Scheme for second-hand cars
A Margin Scheme is being introduced with effect from 1 July 2009 whereby dealers will be taxed on their margin in regard to second-hand cars they acquire and resell after that date.
Second-hand cars acquired before 1 July 2009 and resold after that date will be taxed on their resale price. However, where such a second-hand car is resold before 31 December 2009 the payment of the VAT due on the resale price of the car may be spread in equal amounts over the following three VAT periods. It is not possible to write off the VAT input credit dealers have already received when they purchased the second-hand cars.
The precise details will be contained in the Finance Bill.