Budget 2014, heralded as the last Budget to be made under the supervision of the Troika, has not produced significant change to the area of capital tax planning. Gift/inheritance tax rates remain the same after the rates were increased over the last few budgets from 20% to 33%, The tax free thresholds were also left alone after being slashed in successive budgets where the top threshold was reduced from €542,500 to €225,000. Capital Gains Tax rates remain at the rate of 33% and Stamp Duty rates remain at 1% or 2% as appropriate. Capital loss restrictions have not been tightened further.
The DIRT rate increase to 41% will affect the returns on cash on deposit , particularly for discretionary trusts where there is still confusion over whether the surcharge for undistributed income will apply in addition to this as a base rate. Hopefully there will be clarification of this.
The extension by one year to 31st December 2014 of the purchase of land that will be able to qualify for the CGT seven year exemption has also been welcomed.
The extension of retirement relief for CGT to farmers who lease land on a long lease (greater than 5 years) is welcome but it is restricted to sales to parties other than children, which appears to reduce its usefulness. This does however get over the matter of land leased and then sold where the sale is after 31 December 2013 and the owner is over the age of 66. More details no doubt in the Finance Bill on this.
Welcome news that the office of the Appeal Commissioners will be reviewed in 2014 and submissions can be made in respect of the consultation paper, see here.
Not so welcome news is the indication in the consultation paper on the reform of the Pay and File dates that the filing of CAT returns might not be changed. Despite considerable and consistent lobbying, there still remains a situation that there can be a very short period from the valuation date of a benefit taken and the time to pay the tax on this, such as where tax on benefits taken on 30 August must be paid by 31 October, a mere two months.
