Law Advice: Looking At The Business Side Of The Budget

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In  a new weekly column, Alex Hoffman, the newly appointed Associate Solicitor at Pierse McCarthy Lucey Solicitors, Ashe Street Tralee, says it’s “steady as she goes” as Minister for Public Expenditure, Paschal Donohoe unveils a cautious and subdued budget package…

The headline provisions had all been well flagged and, unlike last year’s dramatic increase in the non-residential stamp duty rate, there were no last-minute surprises.

The Capital Acquisitions Tax threshold for gifts or inheritances from parent to child has been increased by €10,000 to €320,000, which is intended to go some way towards mitigating against the increase in property values over the past year.

The threshold is still a far cry from where it stood at the start of the recession and with the rate of tax still stuck at 33%, succession and estate planning remains essential.

There were no changes to Capital Gains Tax, despite some suggestions in the run up to the Budget that some form of relief was to be introduced for landlords acquiring properties which were subject to existing tenancies.

Landlords will however benefit from the restoration of 100% mortgage interest relief on loans used to purchase, improve or repair rental properties. The rate was due to be restored by 2021 but has now been brought forward to 1st January 2019.

There had also been calls from the Small Firms Association to restore the Capital Gains Tax rate to 20% across the board in order to make investing in a business in Ireland more attractive.

Given the government’s objective to achieve a balanced budget in 2019 a dramatic cut in the rate from 33% to 20% was never likely to happen but some movement in this area would nonetheless be broadly welcomed, not least by anyone contemplating a sale of Kerry Group shares any time soon.

For those in the agri-sector there was some good news. The exemption for Young Trained Farmers from Stamp Duty on agricultural land transactions, which had been due to expire at the end of 2018, has been extended for a further three years to 31 December 2021.

Similarly, Stock relief has been extended for three years until the end of 2021. Significantly there will also be no increase in the carbon tax applied to fossil fuels including diesel, much to the dismay of environmentalists.

This is offset somewhat by the announcement that there will be a 1% VRT surcharge on diesel cars registered from the 1st of January 2019.

Reaction from the business community has been mixed.

While the Construction Industry Federation welcomed the announcement of a €2.3 billion housing package and the 24% increase in capital infrastructure funding, they were disappointed that there was no clarity in relation to an extension of the Help to Buy scheme which is due to expire in December of next year.

Similarly, the Irish Farmers’ Association accepted that the Budget provided “some acknowledgment of the income difficulties in agriculture, but the upcoming major issues of Brexit and CAP will require much more Government commitment and support for farming”.

Unsurprisingly the expected increase in the VAT rate for the hospitality sector from 9% to 13.5% has been criticised by the Restaurants Association of Ireland, and the Vintners’ Federation of Ireland, who described it as “a kick in the teeth”.

• Alex Hoffman has considerable experience in Agricultural Law, Commercial Law, Probate and the Administration of Estates, Taxation, Residential Conveyancing. A Bachelor of Laws in Law & European Studies, AITI Chartered Tax Adviser (CTA).

To make an appointment with Alex Hoffman, contact Pierse McCarthy Lucey Solicitors, 9 Ashe Street, Tralee, between 9:00am and 5:30pm Monday to Friday, on 066 7122900 or email

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