Budget 2024 had something for almost everybody, with increases in many welfare payments, reductions in USC tax, increases in tax bands and tax credits and tax breaks for both renters and landlords.
For businesses, the valuable R&D tax credit was increased to 30% (from 25%), with much needed improvements announced to the EIIS scheme, a new low CGT rate for angel investors and a commitment to look at changes to our entrepreneurial relief regime.
For tenants, the rent credit was increased from €500 to €750. A new temporary tax break for landlords was also introduced, increasing in value through to 2027. While welcome, it’s questionable whether a relief with a maximum benefit of circa €1,000 (in 2026/2027) will be sufficient to retain private landlords in the market.
The Minister noted the link between corporation tax and income tax receipts. High marginal income tax rates act as a deterrent to new and existing foreign investment in Ireland. With Ireland now less competitive on the corporate tax front, a commitment to tackle high marginal income tax rates in the future would have been welcome. With an increasing link between taxable corporate profits and real substance, ie jobs, it was disappointing that there was no comment in this regard.
The changes to personal tax bands and credits, together with the decrease in the 4.5% USC rate to 4% are welcome. For an individual on a salary of €50,000, the tax changes will result in a saving of at least €792 next year. For many, changes elsewhere, such as energy credits, will mean the overall savings from Budget 2024 are greater.
The Minister announced the creation of a new Future Ireland fund, with a target of €100bn by 2035. The fund is aimed at future proofing the demands of an ageing population. Whether the fund reaches its target will be very dependent on our corporation tax receipts. While these have slipped in recent months, the increase in our effective rate to 15% from next year may yet see receipts increase again in future years.
Overall Budget 2024 will have left the vast majority of people better off in nominal terms. For many taxpayers, the total benefit may be over €1,000 in a full year, depending on their circumstances. While substantial, for many the impact of higher interest rates and inflation will be more significant.
Budget 2024
Peter Vale comments on Budget 2024
10 Oct 2023
Budget 2024 had something for almost everybody, with increases in many welfare payments, reductions in USC tax, increases in tax bands and tax credits and tax breaks for both renters and landlords.
For businesses, the valuable R&D tax credit was increased to 30% (from 25%), with much needed improvements announced to the EIIS scheme, a new low CGT rate for angel investors and a commitment to look at changes to our entrepreneurial relief regime.
For tenants, the rent credit was increased from €500 to €750. A new temporary tax break for landlords was also introduced, increasing in value through to 2027. While welcome, it’s questionable whether a relief with a maximum benefit of circa €1,000 (in 2026/2027) will be sufficient to retain private landlords in the market.
The Minister noted the link between corporation tax and income tax receipts. High marginal income tax rates act as a deterrent to new and existing foreign investment in Ireland. With Ireland now less competitive on the corporate tax front, a commitment to tackle high marginal income tax rates in the future would have been welcome. With an increasing link between taxable corporate profits and real substance, ie jobs, it was disappointing that there was no comment in this regard.
The changes to personal tax bands and credits, together with the decrease in the 4.5% USC rate to 4% are welcome. For an individual on a salary of €50,000, the tax changes will result in a saving of at least €792 next year. For many, changes elsewhere, such as energy credits, will mean the overall savings from Budget 2024 are greater.
The Minister announced the creation of a new Future Ireland fund, with a target of €100bn by 2035. The fund is aimed at future proofing the demands of an ageing population. Whether the fund reaches its target will be very dependent on our corporation tax receipts. While these have slipped in recent months, the increase in our effective rate to 15% from next year may yet see receipts increase again in future years.
Overall Budget 2024 will have left the vast majority of people better off in nominal terms. For many taxpayers, the total benefit may be over €1,000 in a full year, depending on their circumstances. While substantial, for many the impact of higher interest rates and inflation will be more significant.
Experts / Authors
Peter Vale
Peter has experience in international corporate tax structuring including; financing structures, company migrations and international reorganisations/reconstructions. He has advised clients on the tax aspects of property investments, both domestic and international.
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