Finance Bill 2015 was published yesterday providing further clarification on the measures announced in last weeks Budget.  We have summarised some of the measures below.

Capital Taxes

A purchaser is obliged to withhold tax at 15% from the consideration on the purchase of certain specified asset where a tax clearance certificate has not been provided by the vendor.  This requirement has been amended with regards to the sale of residential houses and apartments.    A certificate in this instance is now only required if the consideration exceeds €1 million.  The €500,000 threshold still applies in relation to other asset disposals.  This amendment applies to all disposals made after 1 January 2016.

Entrepreneur Relief

A reduced rate of CGT of 20% will apply to the disposal in whole or in part of a business up to a life time limit of €1 million in chargeable gains.   To qualify, the taxpayer must

  • have been a full time working director of the business for at least 3 years prior to the disposal
  • hold at least 15% of the ordinary share capital of a company carrying on a “qualifying business” or
  • 15% of the shares in a holding company which holds 100% of the shares in that company

The relief applies to disposals on or after 1 January 2016.

Income Tax

Tax Free Vouchers to Employees

The provision of a voucher up to €500 in value by an employer to their employee is tax free.

Only one voucher can be given to the employee in any one tax year and it can only be used to purchase goods or services.  The voucher cannot form part of a salary sacrifice arrangement.

This provision comes into effect from 1st January 2016.

Agri Sector

  • General stock relief and stock relief for young trained farmers and registered farm partnerships has been extended to the end of 2018.
  • Stamp Duty exemption for young trained farmers has been extend to the end of 2018.
  • New Succession Farm Partnership provision is being introduced, subject to State Aid approval.  It will allow farmers to enter into a profit sharing partnership which makes provision for the transfer of the farm to the younger famer at the end of a specified period.  An income tax credit worth up to €5,000 per annum for 5 years will be allocated to the partnership and split according to the profit sharing agreement.
    • The transfer must take place within 3-10 years of entering into the partnership,
    • with at least 80% of the farm transferring.
    • In addition, the successor must be no more than 40 years of age on entering the partnership.
    • Where the farm does not transfer within the specified period, the tax credits are clawed back by Revenue.

For more on the Finance Bill measures please see the Finance Bill’s Explanatory Memo which can be accessed here –  Finance Bill Expl. Memo 2015.pdf