Budget Summary 2018

The following is a summary of the tax changes announced by the Minister for Finance and Public Expenditure and Reform. Changes are effective from 1st January 2018 unless stated otherwise.

Income Tax

The tax credits and tax bands changes are in bold.

Tax Credit

Tax Credit 2017 € 2018 €
Single Person 1,650 1,650
Married or in a Civil Partnership 3,300 3,300
Employee Tax Credit 1,650 1,650
Earned Income Tax Credit Max 950 1,150
Widowed Person or Surviving Civil Partner (without qualifying child) 2,190 2,190
Single Person Child Carer Tax Credit 1,650 1,650
Incapacitated Child Credit Max 3,300 3,300
Blind Tax Credit: Single Person

Married or in a Civil Partnership – One Spouse or Civil Partner Blind Married or in a Civil Partnership – Both Spouses or Civil Partners Blind













Widowed Parent: Bereaved in 2017

Bereaved in 2016

Bereaved in 2015

Bereaved in 2014

Bereaved in 2013

Bereaved in 2012


–   3,600











Age Tax Credit:

Single or Widowed or Surviving Civil Partner

Married or in a Civil Partnership







Dependent Relative 70 70
Home Carer Tax Credit 1,100 1,200


Personal Circumstances 2017 € 2018 €
Single or Widowed or Surviving Civil Partner, without qualifying child  

33,800 @ 20%

Balance @ 40%


34,550 @ 20%

Balance @ 40%

Single or Widowed or Surviving Civil Partner, qualifying for Single Person Child

Carer Credit


37,800 @ 20%

Balance @ 40%


38,550 @ 20%

Balance @ 40%

Married or in a Civil Partnership, one Spouse or Civil Partner with Income  

42,800 @ 20%

Balance @ 40%


43,550 @ 20%

Balance @ 40%

Married or in a Civil Partnership, both Spouses or Civil Partners with Income 42,800 @ 20%

with increase of 24,800 max.

Balance @ 40%

43,550 @ 20%

with increase of

25,550 max.

Balance @ 40%


Tax Rates and Tax Bands                                                                                   

 The exemption limits for persons aged 65 years and over remain unchanged:

Personal Circumstances 2017 € 2018 €
Single or Widowed or a Surviving Civil

Partner, 65 years of age & over





Married or in a Civil Partnership, 65 years of age &






The above exemption limits are increased by €575 for

each of the first two dependent children and by €830 for the third and subsequent children.

Marginal Relief may apply, subject to an income limit of twice the relevant exemption limit.

Mortgage Interest Relief

Relief is extended to existing recipients for a further three years on a tapered basis. Qualifying interest applies for each of the three years at the following rates:

2017 2018 2019 2020
Qualifying Interest 100% 75% 50% 25%

The interest ceilings are also reduced for each of the three years as follows

First time buyers
2017 € 2018 € 2019 € 2020 €
Single (unmarried or not in a civil partnership) 10,000 7,500 5,000 2,500
Married, in a civil partnership, widowed, or a surviving

civil partner

20,000 15,000 10,000 5,000
Non-first time buyers
2017 € 2018 € 2019 € 2020 €
Single (unmarried or not in a civil partnership) 3,000 2,250 1,500 750
Married, in a civil partnership, widowed, or a surviving

civil partner

6,000 4,500 3,000 1,500

No relief will be available from 1 January 2021.


Key Employment Engagement Programme (KEEP)

 A new share option scheme will be introduced for employees of unquoted Small and Medium Enterprises with effect from 1st January 2018, subject to EU approval. Under this new scheme, any gain realised on the exercise of a qualifying share option, granted in the period

1st January 2018 to 31st December 2023, will be exempt from Income Tax, USC and PRSI, provided certain conditions are met.

Any gain on the subsequent disposal of the shares acquired under KEEP will be subject to Capital Gains Tax (CGT) in the normal way.

Pre-letting Expenses – Rented Residential Property

A new deduction is being introduced for pre-letting expenses of a revenue nature incurred on a property that has been vacant for a period of 12 months or more. The expenditure must be incurred within the 12 -month period before it is let as a rented residential premises.

A cap on allowable expenses of €5,000 per property will apply, and the relief will be subject to claw back if the property is withdrawn from the rental market within four years. The relief will be available for qualifying expenses incurred up to the end of 2021.

Universal Social Charge (USC)


Standard Rates of USC

USC Thresholds
2017 Rate 2018 Rate
Income up to


0.5% Income up to


Income from

€12,012 to




Income from

€12,012 to




Income from

€18,772 to




Income from

€19,372 to




Income above


8% Income above



 Reduced Rates of USC

USC Thresholds
Individuals aged 70 years or over whose aggregate income for the year is €60,000 or less.


Individuals (aged under 70) who hold a full medical card whose aggregate income for the year is €60,000 or less.

2017 Rate 2018 Rate
Income up to


0.5% Income up to


Income above


2.5% Income above



 Note 1. ‘Aggregate’ income for USC purposes does not include payments from the Dept. of Employment Affairs and Social Protection.

Note 2. A ‘GP only’ card is not considered a full medical card for USC purposes.

Exempt Categories remain unchanged.

2017 2018
Where an individual’s income for a year does not exceed €13,000 Where an individual’s income for a year does not exceed €13,000
All Dept. of Employment Affairs and Social Protection payments All Dept. of Employment Affairs and Social Protection payments
Income already subjected to DIRT Income already subjected to DIRT

3% Surcharge (non-PAYE income)

The surcharge of 3% on individuals who have non-PAYE income that exceeds €100,000 in a year remains unchanged.

 PRSI Contribution Rates

Employee 4.0% 4.0% 0.9%*
Employer 10.75% Nil 2.01%
  • B1 employee rate increases to 4% for income > €1,443 per week.

Value Added Tax (VAT)

Sunbed Services

The VAT rate on sunbed services will be increased from 13.5% to 23% with effect from 1 January 2018.


A compensation scheme is being introduced for charities which are unable to reclaim VAT on inputs. A capped amount will apply to the scheme, with pro-rata payments made where the amount claimed exceeds the amount available. Details of the scheme will be made available when complete.

Corporation Tax (CT)

Accelerated capital allowances for energy-efficient equipment

The accelerated capital allowances scheme for energy- efficient equipment is being extended for a further three years until 31st December 2020.

Capital allowances for intangible assets

A cap of 80% will apply in respect of the amount of capital allowances for an intangible asset, and any related interest expense, that may be deducted from relevant trading income arising from the intangible asset in an accounting period.

The cap applies in respect of expenditure incurred on intangible assets on or after 11th October 2017.

Details will be included in the Finance Bill.


 Sugar Sweetened Drinks Tax (SSDT)

Subject to formal approval by the European Commission, the SSDT will be introduced, in April 2018. It will apply to first supplies in the State of water and juice based drinks with added sugar and a total sugar content of 5g or more per 100 millilitres.

Sugar content

(per 100 millilitres)

between 5g and 8g 20 c per litre
8g or more 30 c per litre

Drinks supplied in concentrated form will be assessed on the basis of the sugar content of the drink at the dilution level intended for consumption.

Capital Gains Tax (CGT)

CGT incentive for land and buildings held for minimum period of seven years

An amendment will be made to section 604A of the Taxes Consolidation Act 1997.

The amendment will provide that gains in respect of land or buildings that were acquired between 7 December 2011 and 31 December 2014 will be exempt from CGT if they are sold after four years and within seven years from the date they were acquired.

Capital Acquisitions Tax (CAT) / CGT

Leasing of agricultural land for solar energy production – CAT agricultural relief and CGT retirement relief

Amendments will be made to CAT agricultural relief and CGT retirement relief so that the leasing of agricultural land for the production of solar energy will not affect entitlement to the reliefs, where the area of the land which is leased for that purpose does not exceed 50% of the total area of the land concerned.

Further details will be included in the Finance Bill.

Exempt Class Thresholds

Despite expectations that the CAT thresholds would be increased, no change was announced in the Budget, so therefore the current thresholds will apply unchanged for 2018:



Applies to Threshold
A Children inheriting

from parent

B Inheriting from other

blood relatives

C Inheriting from



The CAT rate stays the same at 33%.

Stamp Duty

 Transfer or conveyances of non-residential property

The stamp duty on the purchase or transfer of non- residential property (including land) is increased from 2% to 6%. The new rate takes effect for conveyances or transfers of such property that are executed on or after

11 October 2017. Stamp duty is payable by the purchaser.

A stamp duty refund scheme will be introduced in relation to commercial land purchased for the development of housing. Developers will need to have commenced the relevant development within 30 months of the land purchase to qualify for the refund.

Consanguinity relief and agricultural property

The consanguinity (blood relative) rate of stamp duty was due to expire on 31 December 2017 but is to be extended for another three years. On or after 11 October 2017, it is to be charged at 1% of the consideration instead of being set at half the rate of stamp duty that applies to non-residential property. This means that the amount of stamp duty payable will remain unchanged.

This relief applies to transfers of agricultural property between certain blood relatives where the transferee is a young trained farmer who intends to farm the land or lease the land to someone who farms the land for a period of six years.

Benefit in Kind – electric cars & vans

From 1st January 2018 to 31st December 2018, where an employer provides an employee or director with an electric car or van, no taxable benefit will arise for them.

This exemption is limited to cars or vans which derive their motive power solely from electricity (no exemption is available in respect of hybrid cars or vans).


Last year’s Budget provided for a phased reduction in the DIRT rate from 41% in 2016 to 33% by 2020:

DIRT Rates

2016    2017       2018       2019       2020

41%     39%        37%        35%        33%

In 2018 the DIRT rate will therefore fall to 37%.

Exit tax

The Budget speech made no mention of a reduction in the exit tax rate from its current 41%.

Social Welfare

State Pension increases by €5 pw from end March 2018

There is a general €5 pw increase to all Social Welfare pensions, including the State Pensions (Contributory and Non-Contributory) from the end of March 2018.

The new maximum State Pension (Contributory) from March 2018 will be €243.30 pw, or €12,695 pa.


The Minister made no reference to changes in private pension tax reliefs or taxation of benefits despite significant discussions in recent weeks.

Income Tax Relief on Personal Contributions


Age attained during year

% of Net Relevant Earnings (max


Less than 30 15%
30 – 39 20%
40 – 49 25%
50 – 54 30%*
55 – 59 35%
60 and over 40%
  • The 30% limit above also applies to certain professional sportspeople (e.g. professional golfers) under 50 in relation to their income from their sports occupation.

Finance Bill 2017

The Finance Bill will be published on 19th October 2017.



Trust Your Adviser


A recent study from the US suggests that only 8% of people interviewed trust financial institutions. And, more worryingly, only 25% trust their own personal financial planners! (Source: Joe Duran, Investment news). I suspect a similar result may be found in Ireland if the same survey was carried out.

On the one hand, we could simply take from this that people’s stereotypical view of someone working in finance is the “dodgy insurance sales man” flogging products. But, it goes much further. Only 25% trust their own financial advisers – and yet they continue to work with them! Does it not show us that 75% of the population  do not take their own finances serious enough?


Would you hire an electrician to re-wire your house if you didn’t trust their credential, or motives?

I would hope the answer is “No”. So why let someone you don’t trust manage your total personal wealth, which forms the basis for setting and achieving your life goals.

Yes, I have met the clients who have been clearly given completely incorrect or inappropriate advice. Only recently,  we met Mary, an 81 year old lady – a vulnerable client – who had her fund of €200,000 re-invested by a bank in a 5 year Cash Bond. The earning potential was less than 0.5% per annum in cash, but the bond had an annual charge of 1%. Mary would clearly have been better off in a straight forward bank account.   Was the adviser’s judgement clouded by the opportunity to earn commission, or did they simply not take the time to consider what was truly in the best interest of the client? In either case, they had lost Mary’s trust.

But, I have also met the professionals. Through many seminars and study groups, I have met like-minded financial advisers who are professional, experienced and who truly have the interests of their clients at the core of their business. They work tirelessly to explore the best options for the clients, and take the time to really get to know what is important to them. There is a growing number of Certified Financial Planners (CFP®) in the country who have spent up to two years acquiring the professional financial qualification, on top of  many years experience, to bring the financial advisory sector to a different level. These trust-worth Financial Planners are the people to hire to look after your finances.


Ask the Questions  

As a country, we are awkward talking about money, and challenging the cost of services. But as a financial planner, I would encourage you to ask your financial adviser,

  1. What is their background
  2. How many years of experience do they have
  3. What investment/insurance companies do they deal with
  4. Do they have access to a Tax Consultant
  5. Is the service fee or commission-based
  6. What commission are they receiving for business written, and how does this affect any policy, as regards access or charges
  7. How often can you expect to hear from them?

Would you not trust an adviser if they answered these questions satisfactorily? Shouldn’t you expect a call from them, every 6 months at least, to see how you are doing? Yes, you should. It is not hard to establish trust.


The Waypoint Way

At Waypoint Financial Planning, we recognise that we will not be everyone’s cup of tea. Therefore we meet you for one – a cup of tea- at our expense. This gives us a chance to get to know what is important to you, and for you to get to know and trust us. After this initial meeting, we will be able to give you guidance as to where you need to go from here – with or without our help.

We have the combined experience of a Tax Consultant, a  Financial Planner and an Accountant,  all with over twenty years experience in their relevant fields,

Before you decide to engage our services, we will discuss our fees with you. The fee will depend on the complexity of what you want out of the financial planning process.  From the first meeting, we will have got a handle on what is important to you, identified short, medium and long term goals, and established a timeline for each. The second meeting will centre around the results of a detailed questionnaire we will ask you to complete, which will help us produce a detailed cashflow analysis, year by year, building in each goal and time line as it arises.

Most importantly, we are into building a long-lasting trusting relationship with our clients. We would not expect you to engage our services, for example, to map out your life goals, plan for your retirement or build a suitable investment portfolio, without first earning your trust.

I have no doubt the 8% will grow to 88% once we all start asking the questions, and seek out suitable, professional, client-focused financial planners.

Check out our website www.waypoint.ie or ring us on 01-5413702