Budget 1997
 

BUDGET '97

INCOME TAX

TABLE OF CONTENTS

Personal Allowances

Allowance

 Existing £ Budget '97 £
Single Persons

 2,650 2,900
Married Couples 5,300 5,800
Widowed Persons 3,150 3,400
One-Parent Family Allowance:    
Widowed Person
2,150 2,400
Other Person
2,650 2,900
Age Allowance:    
Single/Widowed
200 400
Married
400 800
Incapacitated Child Allowance: 700 No change
Blind Persons Allowance:    
Single/Married - one spouse blind
700 No change
Married - both spouses blind
1,600 No change
Employed Person taking care of incapacitated Taxpayer or Spouse (maximum) 7,500 No change

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Exemption Limits

  Existing Budget '97
Single/Widowed    
General limit (under 65 years of age)
3,900 4,000
65 to 74 years of age
4,500 4,600
75 years of age and over
5,100 5,200
Married    
General limit (under 65 years of age)
7,800 8,000
65 to 74 years of age
9,000 9,200
75 years of age and over
10,200 10,400

The above exemption limits are increased by £450 for each of the first two dependent children and £650 for the third and subsequent children.

Marginal relief will continue to apply where income does not greatly exceed the relevant exemption limit.

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Tax Rates, Bands & Tables

The standard income tax rate is being reduced by 1% from 27% to 26%. In addition, the standard income tax band is being widened by £500 for a single or widowed person and by £1000 for married couples. The rates and bands are:

  Rate

Single/Widowed

Married

  26%

 £9,900

£19,800
  48%

 Balance

Balance

The following are the Tax Tables, Table Allowances and Bands of Taxable Income which apply for 1997/98.

  Tax Table

 Table Allowance

 Bands of Taxable Income
Single/Widowed

 A

 Nil

 First £9,900 @ 26%

Balance @ 48%
Single/Widowed

 B

 £4,538

 All @ 48%
Married Couples

 R

 Nil

 First £19,800 @ 26%

Balance @ 48%
Married Couples

 S

 £9,076

 All @ 48%
Marginal Relief Cases

 Z

Nil

 All @ 40%

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Cars

The cost threshold for capital allowances for new cars and running expenses for all cars has been increased from £14,000 to £15,000.

This new limit will apply to expenditure incurred on or after 23 January 1997.

The threshold for capital allowances on second hand cars continues at £10,000.

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Professional Services Withholding Tax (PSWT)

PSWT is being reduced from 27% to 26% with effect from 6 April 1997.

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Deposit Interest Retention Tax (DIRT)

The standard rate of DIRT is being reduced from 27% to 26% with effect from 6 April 1997. The 15% rate on Special Savings Accounts and the 10% rates on other Special Investment products remain unchanged.

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Farming

  • The general 25% stock relief for farmers is being extended for a further 2 years to 5 April 1999.
  • The existing stock relief scheme for trained farmers under 35 is being extended. Farmers who qualify for the first time for this scheme between 6 April 1997 and 5 April 1999 will be entitled to 100% stock relief for 2 years.
  • A new scheme of accelerated capital allowances is being introduced for expenditure incurred on pollution control facilities on farms. The scheme is to apply to expenditure incurred from 6 April 1997 to 5 April 2000. The rate of allowance in year 1 is 50% of the cost incurred subject to an expenditure limit of £20,000. Expenditure in excess of £20,000 will be written off at 15% per annum for the first 6 years and 10% in the final year.

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Urban Renewal

The current Urban Renewal Scheme is being extended by one year to 31 July 1998. To qualify for the extension at least 15% of construction expenditure must be incurred by 31 July 1997 - the existing deadline.

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Rented Residential Accommodation

Capital Allowances on Fixtures & Fittings will be put on a statutory basis and allowed as follows:

Year 1 to 6 - 15% per annum

Year 7 - 10%

Clarification on the legitimacy of accountancy and other administrative costs against rental income will be published by the Revenue Commissioners in the next issue of Tax Briefing.

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Taxation of Unemployment Benefit

The first £10 per week of Unemployment Benefit will continue to be disregarded for tax purposes.

Systematic short time workers will continue to be exempt from tax on Unemployment Benefit in 1997/98.

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Taxation of Disability Benefit

The first 3 weeks of Disability Benefit will be exempt from tax for 1997/98.

This exemption period will be increased to 6 weeks in 1998/99.

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