As had been largely expected, there were no major announcements in relation to pensions in today’s budget other than the €5 weekly increase in the highest rate of State Pension. This increase will take effect from the last week of March 2019 and bring the highest rate to €248.30 per week. Lower rates apply to those who do not meet the average PRSI contributions requirements.
The pre-Budget papers had highlighted that any decisions on pensions would be for future budgets, in view of the Pensions Roadmap and various consultations and reviews currently taking place.
The Finance Bill will be published on Thursday October 18th and we will monitor that for any additional issues that might arise.
Some of the highlights of yesterday’s budget which may impact on your personal financial planning.
Capital Acquisitions Tax
- The Class A tax free thresholds for gifts or inheritances to children has increased by €10,000 to €320,000. The Class B and Class C thresholds remain at €32,500 and €16,250 respectively.
- The rate of gift or inheritance tax above these thresholds still remains at 33%.
- There has been no change to the annual gift exemption which remains at €3,000.
- The reduced VAT rate of 9% has been increased to 13.5% for the hotel/ restaurant sector and hairdressing with effect from 1 January 2019.
- The lower rate income tax band has been increased by €750 for single or widowed persons to €35,300, for married /civil partnership families with one income the lower band increases to €44,300 while the two incomes band increases to €70,600.
- The USC rates have been cut with the 4.75% rate dropping by .25% and the lower 2% band increasing.
- The Self Employed Earned Income Tax Credit has been increased by €200 to €1,350.
This material is not intended to provide advice and is provided for general information purposes only. The information contained herein is based on Harvest Financial Services Limited’s understanding of the changes announced in Budget 2019 and may change in the future. Further clarification of all the measures announced yesterday will be detailed in the Finance Bill due to be published over the coming weeks. We will provide a further update at this time.