Corporation Tax Reform

The Minister has confirmed that the 12.5% Corporation Tax rate will not change.

Pensions Levy

The Minister went on to confirm that the 0.6% p.a. Pension Levy introduced to fund the Jobs Initiative in 2011 will be abolished from the 31st of December 2014. He went on to confirm that the additional levy on pension funds at 0.15% p.a. will also expire at the end of 2015. This means that the levy will be 0.15% for 2015 and will not apply thereafter.

 

DIRT Tax and Insurance Levy

To support first time buyers saving for their first home, the Minister introduced a refund for Deposit Interest Retention Tax or DIRT on savings used to purchase their home. This refund will apply from Budget night and will run until the end of 2017 in respect of savings up to a maximum of 20% of the purchase price.

As a result, first time buyers will be able to save for their first home and retain 100% of the interest that they earn on their savings. Specific savings products are likely to be introduced to support this new initiative. With regards to Savings generally, unfortunately the Minister did not make any changes to 41%  DIRT and Exit Taxes on Life Assurance Policies and Investment Funds and the Insurance Levy remains unaltered.

We feel that this was a missed opportunity and means that the Life Assurance companies remain at a significant disadvantage compared to other forms of investment.