For the beginning of the Post, please see Part I.
There were a number of other budget changes which will have a huge impact on our economy:
One Parent Family Tax Credit
• The One Parent Family Tax Credit was replace by a new Single Person Child Carer Tax Credit.
• This takes effect from 1st January 2014.
• There is no change to the value of the credit or the additional standard rate band.
• The new credit will only be available to the principal carer of the child.
Medical Insurance Tax Relief
• The Bill restricted the Medical Insurance Tax Relief.
• The maximum amount of the Medical Insurance Premium which can qualify for relief at the standard tax rate will be €1,000 for an adult and €500 per child.
• No tax relief will be available on any excess amounts.
• This charge relates to contracts entered into or renewed on/after 16th October 2013.
Top Slicing Relief
Top Slicing Relief has been abolished completely for all ex-gratia lump sums paid on or after January 1st, 2014.
D.I.R.T. (Deposit Interest Retention Tax)
• The standard D.I.R.T. rate has increased from 33% to 41%.
• The D.I.R.T. rate of 36% has been abolished.
• All deposit interest will be liable to tax at the 41% rate.
• These changes apply to payments made on or after 1st January 2014.
• The exemption for interest on “Special Term Accounts” will be abolished for accounts opened after 15th October 2013.
• Credit Union “Regular Share Accounts” will be subject to D.I.R.T. on interest and dividends paid on or after 1st January 2014.
COMPANY TAX RESIDENCE
There were changes to the company tax residence rules.
The company will be regarded as Irish resident for tax purposes where an Irish incorporated company is managed and controlled in another E.U. member state or treaty state and is not regarded as tax resident in any territory.
This applies from 24th October 2013 for companies incorporated after that date or January 1st, 2015 for companies incorporated before October 24, 2013.