Yesterday, Paschal Donohue (Minister for Finance) and Michael McGrath (Minister for Public Expenditure and Reform) delivered the Budget for 2021 to the Dáil.
We have focused on the pension, investment and estate planning areas of the Budget and any implications for our clients.
It was no surprise that there were no changes in relation to private pensions in Budget 2021. Tax relief on pension contributions and tax exemption of pension investment income remain unchanged, as well as the €200,00 tax free retirement lump sum.
While there were no increases in the State Pension (Contributory), it was confirmed that the State Pension age will remain at 66 for 2021 rather than increasing to age 67. A Commission on Pensions will be established to review this and report by mid-2021 when the Government will consider the Commission’s report.
There were no changes to Gift or Inheritance tax rates and thresholds. Income tax rate and bands were also maintained at current levels, as were DIRT and Exit Tax on investments.
The detail in the Budget and other amendments in tax legislation will be contained in the Finance Bill 2020 which should be published on 22 October 2020.
While this was seen as a ‘give-away’ Budget, given the extraordinary times we find ourselves in the attention in future Budgets may turn to tax increases to fund it. This may necessitate bringing forward some future planning. As always, your Client Advisor is available to speak to you about your long term financial objectives on 01 237500 or email firstname.lastname@example.org.
The legislative information contained herein is based on Harvest Financial Services Limited’s understanding of current practice as at October 2020 and may be subject to change in the future. The marketing material is not intended to provide advice and is provided for general information purposes only.