Finance Act 2018

PART 1 Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1 Interpretation

1. Interpretation (Part 1)

1. In this Part “Principal Act” means the Taxes Consolidation Act 1997.

Chapter 2 Universal Social Charge

2. Amendment of section 531AN of Principal Act (rate of charge)

2. (1) Section 531AN of the Principal Act is amended—

(a) in subsection (3), by substituting “€19,874” for “€19,372”, and

(b) by substituting the following Table for the Table to that section:

“TABLE

PART 1

Part of aggregate income	Rate of universal social charge
(1)	(2)
The first €12,012	0.5 per cent
The next €7,862	2 per cent
The next €50,170	4.5 per cent
The remainder	8 per cent

PART 2

Part of aggregate income	Rate of universal social charge
(1)	(2)
The first €12,012	0.5 per cent
The remainder	2 per cent

”.

(2) Subsection (1) applies for the year of assessment 2019 and each subsequent year of assessment.

Chapter 3 Income Tax

3. Amendment of section 15 of Principal Act (rate of charge)

3. As respects the year of assessment 2019 and subsequent years of assessment section 15 of the Principal Act is amended—

(a) in subsection (3)(i), by substituting “€26,300” for “€25,550”, and

(b) by substituting the following Table for the Table to that section:

“TABLE

PART 1

Part of taxable income (1)	Rate of tax (2)	Description of rate (3)
The first €35,300	20 per cent	the standard rate
The remainder	40 per cent	the higher rate

PART 2

Part of taxable income (1)	Rate of tax (2)	Description of rate (3)
The first €39,300	20 per cent	the standard rate
The remainder	40 per cent	the higher rate

PART 3

Part of taxable income (1)	Rate of tax (2)	Description of rate (3)
The first €44,300	20 per cent	the standard rate
The remainder	40 per cent	the higher rate

”.

4. Amendment of section 472AB of Principal Act (earned income tax credit)

4. (1) Section 472AB of the Principal Act is amended in subsection (2)—

(a) in paragraph (a), by substituting “€1,350” for “€1,150”, and

(b) in paragraph (b), by substituting “€1,350” for “€1,150”.

(2) Subsection (1) applies for the year of assessment 2019 and each subsequent year of assessment.

5. Amendment of section 466A of Principal Act (home carer tax credit)

5. (1) Section 466A of the Principal Act is amended in subsection (2) by substituting “€1,500” for “€1,200”.

(2) Subsection (1) applies for the year of assessment 2019 and each subsequent year of assessment.

6. Amendment of section 191 of Principal Act (taxation treatment of Hepatitis C compensation payments)

6. (1) Section 191 of the Principal Act is amended—

(a) in subsection (1), by inserting the following definitions:

“ ‘comparable overseas scheme’ means a scheme, located in a Member State of the European Economic Area (other than the State), whose purpose is to compensate individuals who have been diagnosed positive for Hepatitis C or HIV resulting from the use of blood products;

‘eligible person’ means—

(a) a person referred to in subsection (1) of section 4 of the Act, in respect of matters referred to in that section,

(b) a person referred to in any Regulations made under section 9 of the Act, in respect of matters referred to in those Regulations, or

(c) a person eligible to receive a payment from a comparable overseas scheme;”,

(b) by substituting the following for subsection (2):

“(2) This section shall apply to any payment in respect of compensation—

(a) by the Tribunal in accordance with the Act,

(b) following the institution by or on behalf of a person of a civil action for damages in respect of personal injury, or

(c) by a comparable overseas scheme,

to an eligible person.”,

and

(c) in subsection (3)(b), by inserting “or a comparable overseas scheme” after “the Tribunal”.

(2) Subsection (1) shall come into operation on 1 January 2019.

7. Exemption of certain childcare support payments

7. Chapter 1 of Part 7 of the Principal Act is amended by inserting the following section after section 194A:

“Exemption of certain childcare support payments

194AA. (1) In this section—

‘cohabitant’ has the same meaning as it has in Part 44B;

‘eligible child’ means a child in respect of whom a qualifying payment or a relevant payment is made;

‘Minister’ means the Minister for Children and Youth Affairs;

‘qualifying payment’ means a payment made under section 15 of the Childcare Support Act 2018;

‘relevant payment’ means a payment made by or on behalf of the Minister under any of the following childcare support programmes or schemes:

(a) Community Childcare Subvention;

(b) Community Childcare Subvention Plus;

(c) Community Childcare Subvention Resettlement;

(d) Community Childcare Subvention Resettlement (Transitional);

(e) Community Childcare Subvention Universal;

(f) Training and Employment Childcare.

(2) A qualifying payment shall be exempt from income tax and shall not be reckoned in computing income of the parent or guardian, or the cohabitant of the parent or guardian, of an eligible child for the purposes of the Income Tax Acts.

(3) A relevant payment made on or after 1 January 2019 shall be exempt from income tax and shall not be reckoned in computing income of the parent or guardian, or the cohabitant of the parent or guardian, of the eligible child for the purposes of the Income Tax Acts.

(4) A relevant payment made before 1 January 2019 shall be treated as if it was exempt from income tax in the year of assessment to which it relates and shall not be reckoned in computing income of the parent or guardian, or the cohabitant of the parent or guardian, of the eligible child for the purposes of the Income Tax Acts.”.

8. Certain benefits in kind: members of the Permanent Defence Force

8. (1) Chapter 3 of Part 5 of the Principal Act is amended by inserting the following section after section 120A:

“Certain benefits in kind: members of Permanent Defence Force

120B. (1) Notwithstanding section 118, section 112 shall not apply in relation to any expense incurred by or on behalf of the Minister for Defence—

(a) in or in connection with the provision of living accommodation to a member of the Permanent Defence Force on land occupied by, used by, or under the control (whether temporarily or otherwise) of the Permanent Defence Force, or

(b) in or in connection with the provision of health care to a member of the Permanent Defence Force.

(2) In this section—

‘health care’ means prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability, and includes care received by a woman in respect of a pregnancy, but does not include—

(a) routine ophthalmic treatment, or

(b) cosmetic surgery or similar procedures, unless the surgery or procedure is necessary to ameliorate a physical deformity arising from, or directly related to, a congenital abnormality, a personal injury or a disfiguring disease;

‘routine ophthalmic treatment’ means the provision and repairing of spectacles or contact lenses.”.

(2) Subsection (1) shall apply for the year of assessment 2018 and each subsequent year of assessment.

9. Benefit in kind: relief relating to electric vehicles

9. Part 5 of the Principal Act is amended—

(a) in section 121(2)(b)—

(i) in subparagraph (ii), by substituting “running the car,” for “running the car, and”,

(ii) in subparagraph (iii)(II), by substituting “31 December 2018,” for “31 December 2018.”, and

(iii) by inserting the following subparagraphs after subparagraph (iii):

“(iv) notwithstanding subparagraph (ii), where a car made available during the period 1 January 2019 to 31 December 2021 is an electric vehicle and the original market value of the car does not exceed €50,000, no amount shall be treated as emoluments of the employment,

(v) notwithstanding subparagraph (ii), where—

(I) a car made available to an employee during the period 1 January 2019 to 31 December 2020 is an electric vehicle,

(II) the original market value of the car exceeds €50,000, and

(III) the car was first made available to the employee during the period 10 October 2017 to 9 October 2018,

no amount shall be treated as emoluments of the employment, and

(vi) where a car made available during the period 1 January 2019 to 31 December 2021 is an electric vehicle and the original market value of the car exceeds €50,000, the cash equivalent of the benefit of the car ascertained under subsection (3)(a) or (4)(a), as the case may be, shall be computed on the original market value of the car reduced by €50,000.”.

and

(b) in section 121A(2)(b)—

(i) in subparagraph (ii), by substituting “running the van,” for “running the van, and”,

(ii) in subparagraph (iii)(II), by substituting “31 December 2018,” for “31 December 2018.”, and

(iii) by inserting the following subparagraphs after subparagraph (iii):

“(iv) notwithstanding subparagraph (ii), where a van made available during the period 1 January 2019 to 31 December 2021 is an electric vehicle and the original market value of the van does not exceed €50,000, no amount shall be treated as emoluments of the employment,

(v) notwithstanding subparagraph (ii), where—

(I) a van made available to an employee during the period 1 January 2019 to 31 December 2020 is an electric vehicle,

(II) the original market value of the van exceeds €50,000, and

(III) the van was first made available to the employee during the period 10 October 2017 to 9 October 2018,

no amount shall be treated as emoluments of the employment, and

(vi) where a van made available during the period 1 January 2019 to 31 December 2021 is an electric vehicle and the original market value of the van exceeds €50,000, the cash equivalent of the benefit of the van ascertained under subsection (3) shall be computed on the original market value of the van reduced by €50,000.”.

10. Amendment of section 985A of Principal Act (application of section 985 to certain perquisites, etc.)

10. Section 985A of the Principal Act is amended in subsection (1)(a)(iii) by substituting “section 112A or 112AA” for “section 112A”.

11. Amendment of section 128F of Principal Act (key employee engagement programme)

11. (1) Section 128F of the Principal Act is amended—

(a) in subsection (1), in the definition of “qualifying share option”, by substituting the following paragraph for paragraph (d):

“(d) the total market value of all shares, in respect of which qualifying share options have been granted by the qualifying company to an employee or director, does not exceed—

(i) €100,000 in any one year of assessment,

(ii) €300,000 in all years of assessment, or

(iii) the amount of annual emoluments of the qualifying individual in the year of assessment in which the qualifying share option is granted,”,

and

(b) in subsection (8), by substituting “The Revenue Commissioners may publish the following information in relation to all qualifying companies:” for all of the words from and including “A qualifying company” down to and including “all qualifying companies:”.

(2) Subsection (1)(a) shall come into operation on such day as the Minister for Finance may appoint by order.

12. Retirement benefits

12. (1) The Principal Act is amended by inserting the following section after section 790C:

“Relief for additional superannuation contribution under Public Service Pay and Pensions Act 2017

790CA. Any additional superannuation contribution payable under the Public Service Pay and Pensions Act 2017 by a public servant (within the meaning of that Act) shall, in assessing income tax under Schedule E, be allowed to be deducted as an expense incurred in the year in which the contribution is paid.”.

(2) Subsection (1) applies for the year of assessment 2019 and each subsequent year of assessment.

13. Amendment of section 126 of Principal Act (tax treatment of certain benefits payable under Social Welfare Acts)

13. Section 126 of the Principal Act is amended—

(a) by substituting the following for subsection (1):

“(1) In this section—

‘the Acts’ means the Social Welfare Acts;

‘the Act of 2005’ means the Social Welfare Consolidation Act 2005.”,

(b) by inserting the following after subsection (6):

“(6A) A payment which is—

(a) described in column (1) of the Table to this section,

(b) paid on the basis specified in column (2) of that Table, and

(c) made by the Minister for Employment Affairs and Social Protection to an individual on or after 1 January 2019,

shall be exempt from income tax and shall not be reckoned in computing income for the purposes of the Income Tax Acts.

(6B) A payment which—

(a) is described in column (1) of the Table to this section,

(b) is paid on the basis specified in column (2) of that Table, and

(c) was made by the Minister for Employment Affairs and Social Protection to an individual before 1 January 2019,

shall be treated as if it was exempt from income tax in the year of assessment to which it relates and shall not be reckoned in computing income for the purposes of the Income Tax Acts.”,

(c) by deleting subsection (7), and

(d) by inserting the following Table to the section:

“TABLE

Description of payment (1)	Basis on which payment is made (2)
Basic supplementary welfare allowance	Section 189 of the Act of 2005
Back to education allowance	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Back to education allowance’
Back to work enterprise allowance	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Back to work enterprise allowance’
Back to school clothing and footwear allowance	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Back to school clothing and footwear allowance’
Carer’s support grant	Section 225 of the Act of 2005
Constant attendance allowance	Section 78 of the Act of 2005
Death benefit - funeral expenses	Section 84 of the Act of 2005
Death benefit - orphans	Section 83 of the Act of 2005
Direct provision allowance	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Direct provision allowance’
Disability allowance	Section 210 of the Act of 2005
Disablement gratuity	Section 75(8) of the Act of 2005
Domiciliary care allowance	Section 186F of the Act of 2005
Exceptional needs payment	Section 201 of the Act of 2005
Farm assist	Section 214 of the Act of 2005
Fuel allowance	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Fuel allowance’
Guardian’s payment (contributory)	Section 130 of the Act of 2005
Guardian’s payment (non-contributory)	Section 168 of the Act of 2005
Household benefit package	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Household benefit package’
Humanitarian assistance payment	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Humanitarian assistance payment’
Jobseeker’s allowance	Section 141 of the Act of 2005
Jobseeker’s transitional payment	Section 148A of the Act of 2005
Medical care	Section 86 of the Act of 2005
Part-time job incentive scheme	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Part-time job incentive scheme’
Rent allowance	Section 23 of the Housing (Private Rented Dwellings) Act 1982
Supplementary welfare allowance	Section 198 of the Act of 2005
Telephone support allowance	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Telephone support allowance’
Training support grant	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Training support grant’
Urgent needs payment	Section 202 of the Act of 2005
Widowed or surviving civil partner grant	Section 137 of the Act of 2005
Working family payment	Section 228 of the Act of 2005
Youth employment support scheme	A payment made under a scheme administered by the Minister for Employment Affairs and Social Protection and known as ‘Youth employment support scheme’

”.

14. Relief arising in special circumstances