Please read our Nelson Life Budget summary 2019
- NO CHANGE: Tax Relief – Employee Pension Contributions – This will continue at the marginal rate of income tax, however, subject to the Age Related Contribution Limits and Earnings Cap, if applicable (and overall Revenue Maximum Approved Benefit limits)
- NO CHANGE : Tax Relief – Employer Pension Contributions - Corporation Tax relief will continue to be available on employer pension contributions – subject to the overall maximum pension limits
- NO CHANGE: Employer Corporation Tax - rate to remain at 12.5% on trading income
- NO CHANGE: Earnings Cap - amount to remain at €115,000.
- NO CHANGE: Retirement Lump Sum - up to €200,000 remains tax-free and amounts from €200,000 to €500,000 will be taxed at 20%.
- NO CHANGE: Standard Fund Threshold – currently €2 million. There are significant additional tax liabilities where the limit is exceeded. We will wait for the Finance Bill 2017 to see whether the SFT from 2018 has been amended in line with an earnings adjustment factor.
- ATTENTION EMPLOYERS – GOVERNMENT PENSION ROADMAP – The Reform Plan was launched earlier this year confirms that Auto Enrolment will be introduced by 2022. Something had to change – 1 million workers (2/3rds of private sector workforce) who currently have no pension provision………….for guidance on Employer Pension obligations please readwww.saver.ieand/or contact us
- AMRF/ARF policy owners. In the context of the €12,700 guaranteed income requirement before being eligible for an ARF, when this increase commences, it leaves a small pension income shortfall. If this shortfall is NOT bridged then €63,500 has to be invested into an AMRF until aged 75. This GAP is now bridged.
Life Cover, investment, deposits & Taxation – DIRT and exit tax.
- NO CHANGE : Tax treatment of death benefits. No changes at all to the important “family protection” contracts put in place for loved ones/financial dependents.
- CHANGE : With regards to Savings and Investment, the phased reduction in DIRT was introduced last year. This means that the rate of DIRT reduced by 2% to 37% for 2018 (and will reduce further to 33% by 2020 in 2% p.a. increments). At that stage it will be in line with the current rate of Capital Gains Tax.
- NO CHANGE: The Insurance Levy on Protection policies and investment/savings policies was not reduced or removed and remains unchanged at 1%. The rate of Exit Tax on Life Assurance Policies and Investment Funds was also unchanged and remains at 41%. These are both penal taxes.
- NO CHANGE: Savings: Corporate Deposits. The current corporate exit tax rate remains at 25%, in line with corporation tax for non-trading income.
- CHANGE: Capital Acquisition Tax (CAT) – The Group A Threshold (gifts or inheritance to son/daughter) changed to €320,000. all other Groups – no change.
- NO CHANGE – Small Gift Exemption Scheme. You can still gift €3,000 per annum per individual.
Please Note: The information contained in this document is intended to describe the subject in general terms. It does not attempt to cover every issue which may arise.
If you have a financial planning or product question please contact us :
This article was written by Rory Nelson, founder of Nelson Life. Rory is celebrating 20 years in financial planning this year. Professional qualifications include; UCD Specialist Diploma in Wealth Management, Pension Trustee Practitioner PTP, UCD Professional Certificate in Stockbroking,UCD Professional Certificate in Asset Management (SIA), QFA FLIA, Pensions Diploma, Mortgage Advice Diploma, CFP module – Tax & Estate Planning and has a degree in BA Accounting & Finance. He has regularly participated in national financial press.
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LIFE INSURANCE | INVESTMENTS | PENSIONS | FINANCIAL PLANNING.
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- WARNING: The above content does not constitute investment advice, as it does not take into account the investment objectives, knowledge and experience of financial situation of any particular person. Prospective investors are advised to make their own assessment of the information contained herein and to obtain professional advice suitable to their own individual circumstances.
- WARNING: The information contained in this document is based on our understanding of current tax legislation and the current Revenue Commissioners interpretation thereof and is subject to change including retrospectively without notice. This is intended as a general guide only and is not a substitute for professional tax, legal and investment advice.
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