Farmers on income averaging will now be allowed, in a very poor income year, to pay only the tax due on the current year. The deferred tax liability will be payable over subsequent years. This measure will be available immediately.
CGT Relief for Farm Restructuring
Extended to end 31st December 2019.
Accelerated Capital Allowances for Energy Efficient Investment
This measure has been extended to sole traders and provides full capital allowance in the first year.
Increased from 5.2% to 5.4% from 1st January 2017 and is worth €9m.
Capital Acquisitions Tax – Agricultural Relief
Retained at 90%. The increase in the Group thresholds for exemption from CAT will increase the value of farm that can be transferred through Agricultural Relief.
Raised Bog CGT Relief
Payments under the Raised Bog Restoration Incentive scheme will be exempt from Capital Gains Tax.
General Taxation Measures
Earned Income Tax credit
For self-employed tax payers, including farmers, who do not receive the PAYE Tax Credit, the Earned Income Tax Credit of €550 is being increased by a further €400 to €950.
Universal Social charge
The rates of USC are being reduced as follows:
– The lowest rate of 1% is to be reduced to 0.5%; this applies to the first €12,012 of income.
– The 3% rate is to be reduced to 2.5%; this applies on income from €12,013 to €18,772.
– The 5.5% rate is to fall to 5%; this applies to income between €18,773 up to €70,044.
Other Income Tax changes
H0me Carer Credit
The Home Carer tax credit is being increased by €100 to €1,100.
Invalidity Pension: Eligibility for the Invalidity Pension is being extended to the self-employed, including farmers.
The rate of DIRT tax is being reduced from 41% to 39%. The Government’s intention is to reduce this further by 2% / year to reach 33% by 2020.
Capital Acquisitions Tax
The Group A (parent to child) CAT threshold is being increased from €280,000 to €310,000. The Group B threshold (brother, sister, niece, nephew, grandchild) is being increased from €30,150 to €32,500. The Group C threshold (all others) is being increased from €15,075 to €16,250.
CGT Entrepreneur Relief
The rate of CGT on the sale of business is reduced from 20% to 10%, for disposals of value up to €1m on qualifying chargeable gains.
Relief from Carbon Tax is provided for solid fuels that include a biomass element and for fuel inputs to combined heat and power plants (CHP).
Help to Buy
A new income tax rebate for first time buyers of new houses is being introduced, providing a maximum rebate of €20,000.