Budget 2017 was announced last week in the Dáil. I am not going to go through all of the details of the Budget, there were a few items that caught my eye. The self employed do especially well out of Budget 2017.
The self employed (and proprietary directors) got a lot of benefits in this budget.
The Invalidity pension and Treatment Scheme are funded by employer’s PRSI, which self employed people do not pay. This makes me suspect that there will be an increase in PRSI contributions for the self employed in the future.
For those with an income protection cover, remember that the maximum you can claim is 75% of salary less anything paid by the State. The payment of this benefit may result in you being over insured, so you may need to review the level of cover you have in place.
The threshold on Inheritance Tax from a parent to a child was increased from €280,000 to €310,000. The remainder is still taxed at 33%. There were minor tweaks to the other two thresholds.
This is a long way from 2009 when you could inherit €545,544 and pay tax at 20% on the remainder. Ireland currently pays the highest level of inheritance tax of all modern economies.
DIRT on deposit interest is to be reduced by 2% each year for the next 4 years to bring it down to 33%. With interest rates currently so low, this will not make much of a difference to how much extra is put into your bank account when the interest is paid.
Clients looking for higher than interest rate returns have had to invest their money instead of deposits. The exit tax on their profit is taxed at 41%. There was no announcement in the Budget to reduce this exit tax in line with the reduction of DIRT. I expect lobbying by the insurance companies to have this tax reduced in line with DIRT.
An income tax rebate was announced for first time buyers of new homes
I presume that the last two points are included that if you can afford a deposit greater than 20% or can afford a house worth over €600,000, you are doing alright as it is.
There were no changes made to pensions in the Budget to speak of. The devil is always in the detail though. The Finance Bill is announced on 20 October so we will be keeping a close eye on that to see what it says.
If you have any questions, you can contact me directly at firstname.lastname@example.org