Ireland Budget

Ireland's annual Budget is usually announced in October. But with the Irish government having checked down the back of sofa, and concluded that it is skint, it has now announced another Budget.  This, in an English context, is equivalent to a Post-Budget report and we must hope the idea does not catch on here.

In what could be a forerunner of what the UK can expect from our trough-feeding politicos on 22 April, Ireland has imposed significant increases in the rates of income tax,  PRSI (NIC), capital gains and stamp duty, reduced the CAT (IHT) thresholds and increased DIRT (deduction of tax at source).

Additionally, interest deductions for loans used to acquire rented out residential properties (whether in Ireland or overseas) are, with immediate effect, restricted to 75% of the interest paid, although there is no equivalent restriction on interest paid on loans taken out to improve or repair such properties.  We are not aware of the policy thinking behind this change but Ireland has also had its own buy-to let phenonenom in recent years and we suspect there are some commentators who might also like to see a similar loan interest restriction introduced in the UK.

Lastly, there continues to be no change whatsoever to Ireland's own remittance basis for its non-domiciled residents.  It remains curious how a country with a not dissimilar, albeit a much smaller, profile to the UK, continues to show absolutely no appetite for changing its longstanding favoured code for foreigners.