As anticipated, the restriction of reliefs for High Earners is being amended for 2010 and subsequent tax years in order to achieve an 30% effective rate of income tax for those subject to the full restriction. This represents a 10% rise in the effective rate which currently applies.
The entry level threshold for the restriction will now occur at adjusted income levels of €125,000 and the full restriction will apply at €400,000. Chartered Accountants will be aware that under the current rules, only those individuals with incomes in excess of €500,000 are fully impacted by the restriction. Individuals earning between €250,000 and €500,000 are partially affected.