Budget 2027 was announced today with a background of continuing pressures arising from increases in the costs of living. We are now told that this is the dominant concern in the minds of the public.
The Minister for Finance set out the need for a Budget that will bring in measures to assist with energy costs, childcare, and other household costs as well as changes to the tax system to make a real difference to the amount of tax people pay. The total tax package announced is €1.65bn.
On the taxation of individuals, the standard rate tax band is increased to €46,500 from €44,000 for single individuals with consequential changes to other earners and there are small changes to standard tax credits.
For businesses in general, the Budget focuses on encouraging innovation and investment in new businesses with positive changes to the R&D Tax Credit regime, proposed extensions to Relief for Investment in Corporate Trades scheme and relief for Start-Up companies. While there were no significant new reliefs announced for businesses, Minister Harris announced a complete review of the various grant schemes, enterprise tax incentives and business development programmes currently on offer. In addition, Minister Chambers has allocated €3 million for Enterprise Ireland to establish Start up Ireland as a national entrepreneurship initiative and single-entry point for founders.
There are some changes relating to the agricultural sector including accelerated capital allowances for qualifying Farm Safety Equipment and Tax Credits relating to Succession Farm Partnerships.
Despitesignificant debate around the Capital Acquisitions Tax thresholds and thearguments for significant changes, there are only small increases:
•Category A (parent to child)moving to €420,000 from €400,000,
•Category B (other familymembers), €44,000 from €40,000, and
•Category C (others), €22,000 from€20,000.
Finally, a welcome change to the capital gains tax rate to 31% from 33% but no change to the Entrepreneur Relief regime with the lifetime limit applying to the 10%capital gains tax rate for certain disposals of business assets including shares in a trading company unchanged at €1.5m.
To view our full breakdown of Budget 2027, CLICK HERE.
For further information, get in touch:
Michael O'Leary, Tax Partner
Deborah Drought, Tax Partner
