Budget 2025 has been announced! Here’s a breakdown of the key highlights and what they could mean for individuals, families, and businesses across the country.

Corporate Tax Changes

• Starting January 1, 2025, Ireland will introduce a participation exemption for foreign dividends, aimed at simplifying corporate tax rules. The government will also work on a streamlined mechanism for double tax relief and consider foreign branch exemptions over the coming year.

• Additionally, a review of the research and development (R&D) tax credit is planned, with an immediate increase in the credit threshold from €50,000 to €75,000. The start-up capital incentive will rise from €700,000 to €980,000, encouraging new businesses.

• Furthermore, a new tax credit for the audiovisual scripted sector will be introduced, pending European approval, offering up to €15 million at a 20% rate on qualifying expenditures. Lastly, an 8% uplift under the film tax credit will apply to feature films with maximum expenditures of €20 million.

Capital Gains Tax 

• Angel investors in innovative start ups :

Individuals invest in these start-ups for a period of 3 years.

Investment in the form of Ordinary Share Capital of The Company.

Receive an effective CGT rate of 16% or 18%.

Investment limit increased up to €10 million.

• Retirement Relief:

 Upper age limit is increased to 70.

12 Year Clawback period for disposals over €10m.

Business Supports

• A participation exemption for foreign dividends will take effect starting January 1, 2025.

• The threshold for the R&D tax credit will be increased from €50,000 to €75,000.

• An 8% uplift will be applied under the film tax credit for feature films.

• Additionally, a new relief will be introduced for expenses incurred by companies making their first listing on the Irish Stock Exchange.

• VAT registration thresholds for the supply of goods and services will also be raised to € 42,500 for services and € 85,000 for goods.

• The amount that investors can claim relief on through the Employment and Investment Incentive Scheme (EIIS) will be doubled, increasing from €500,000 to €1 million.

• SURE Investments – maximum relief increased to € 140,000 per year        ( €980k over 7 years)

Personal Tax

• Universal social charge is reduced from 4% to 3% for incomes ranging from €27,382 to €70,004. 

• The entry threshold to the new 3 per cent rate of USC is being increased by €1,622 t0 €27,832, in line with the increase to the national minimum wage.

• The threshold for the higher rate of income tax ( Standard rate cut off point) will be increased by €2,000, raising it to €44,000.

• Personal tax credits will see an increase of €125, while the home care tax credit and the single person child carer tax credit will each rise by €150. Furthermore, the incapacitated child tax credit will be increased by €300. 

• Capital Acquisitions Tax

Will increase as follows :

Group A to € 400,000 ( from 335k)

Group B to € 40,000    ( from 32.5k)

Group C to € 20,000  ( from 16.25k)

Property

• Help to buy scheme is continued until the end of 2029
• Pre Letting expenses relief is extended to end of 2027
• Vacant Homes Tax is being increased from 5 to 7 times from November 2024
• Rental Tax Credit increased to € 1,000 (€2,000 for a jointly assessed taxpayer).This will apply for 2024 and 2025.
• Mortgage Interest Relief for qualifying homeowners for increased interest paid on their mortgage for the calendar year 2024 versus 2023 at the standard tax rate of 20% capped at €1,250 per property.

Social Protection 

• Core welfare rates have been raised by €12 per week.
• Families will receive two double child benefit payments before Christmas, with child benefit set at €140 for one child, €280 for two, and €420 for three.
• The means test disregard for the carers’ allowance will be increased to €625 for single individuals and €1,250 for couples.
• The rate of the domiciliary care allowance will rise by €20.
• The carers’ support grant is being increased by €150, bringing it to €2,000.
• Maternity, paternity, adoptive, and parents’ payments will all see an increase of €15.
• Additionally, families will receive a payment of €420 for each newborn child.

Enterprise 

• IDA Ireland will see an increase in funding of €15.5 million.
• Enterprise Ireland’s funding will rise by €9.7 million.
• The Department of Enterprise’s science and technology program will be boosted with an additional €1.2 million.
• The Workplace Relations Commission (WRC) will receive an extra €1.6 million.
• The Competition and Consumer Protection Commission (CCPC) will benefit from an additional €2 million.