Personal Allowances
In his Budget Statement on 1 December 1999 the Minister for Finance announced the extension of the standard rating of personal allowances to cater for the introduction of a full tax credit system from 6 April 2001.
A full list of the personal allowances which will be standard rated from 6 April 2000 is given in the Chart below. Standard rating means that tax relief will be given at the standard rate of tax, 22%.
| Personal Allowance | Existing | Budget 2000 | |
| Amount at | |||
| Standard Rate 24% | Individual's Highest Tax Rate 24% or 46% | Amount at Standard Rate 22% | |
| Single Person | £4,200 | - | £4,700 |
| Married Person | £8,400 | - | £9,400 |
| Widowed Person (without dependent children) | £4,200 | £500 | £5,700 |
| One-Parent Family | |||
| Widowed Person | £1,050 | £2,650 | £4,700 |
| Other Person | £1,050 | £3,150 | £4,700 |
| Widowed Parent Allowance | |||
| Bereaved in 1999/2000 1998/99 1997/98 1996/97 1995/96 |
£5,000 £4,000 £3,000 £2,000 £1,000 |
£10,000 £8,000 £6,000 £4,000 £2,000 |
|
| PAYE Allowance | £1,000 | - | £1,000 |
| Age Allowance | |||
| Single/Widowed | - | £400 | £800 |
| Married | - | £800 | £1,600 |
| Blind Allowance | |||
| One Spouse Blind | - | £1,500 | £3,000 |
| Both Spouses Blind | - | £3,000 | £6,000 |
| Incapacitated Child | - | Max. £800 | Max. £1,600 |
| Dependent Relative | - | Max. £110 | Max. £220 |
Tax Rates, Bands & Tables
The tax rates are being reduced by 2% - from 24% to 22% and from 46% to 44%.
As part of a move towards individualisation of the standard rate bands:
the standard rate band will be widened from £14,000 to £17,000 for a single or widowed person without dependent children
a new standard rate band of £20,150 will be introduced for a single or widowed person with dependent children
the standard rate band for a married couple with one income will remain unchanged at £28,000
the standard rate band for a married couple, both with income, will be £28,000 subject to an increase of up to £6,000. The increase will be the lower of £6,000 or the amount of the income of the spouse with the lower income - this increase is not transferable between spouses.
Tax Tables, Table Allowances & Tax Bands for 2000/2001 are:
| Tax Table | Table Allowance | Bands of Taxable Income |
| A | Single/Widowed without dependent children | |
| NIL | £17,000 @ 22% Balance @ 44% |
|
| Single/Widowed with dependent children | ||
| NIL | £20,150 @ 22% Balance @ 44% |
|
| B | Single/Widowed without dependent children | |
| £8,500 | All at 44% | |
| Single/Widowed with dependent children | ||
| £10,075 | All @ 44% | |
| Married | ||
| R | NIL | £28,000 (with increase of max. £6,000 - see above)
@ 22% Balance @44% |
| S | £14,000 (with increase of max. £3000* - see below) | All @ 44% |
| Z | NIL | All @ 40% |
* The increase of up to £3,000 for Table S in not transferable between spouses.
Exemption Limits
| Single/Widowed | Existing | Budget '00 |
| General Limit (under 65 years of age) | £4,100 | £4,100 |
| 65 years of age & over | £6,500 | £7,500 |
| Married | ||
| General Limit (under 65 years of age) | £8,200 | £8,200 |
| 65 years of age & over | £13,000 | £15,000 |
Marginal Relief will continue to apply where income does not greatly exceed the relevant exemption limit.
The above exemption limits are increased by £450 for each of the first two dependent children and £650 for the third and subsequent children.
Rent Relief for Rented Accommodation
Rent relief will be increased as follows and will be available at the standard rate, 22%
| Rent Allowance | Single | Widowed | Married |
| Under 55 Max. | £750 | £1,125 | £1,500 |
| Over 55 Max. | £2,000 | £3,000 | £4,000 |
Mortgage Interest Relief
Home Loan Interest paid is allowable at the standard rate of 22% and is subject to the following maximum amounts:
First Time Buyer (First 5 years)
Single £2,500
Married/Widowed £5,000*
Others
Single £2,000
Married/Widowed £4,000*
The existing 80% and £100/£200 (single/married, respectively) restrictions have been abolished.
*Widowed Person's limit is now the same as that of a Married Couple.
Taxation of Unemployment Benefit
Systematic short-time workers will continue to be exempt from tax on Unemployment Benefit in 2000/2001.
Benefit-in-Kind
Preferential Loans
The "specified" rate for the purposes of calculating the benefit-in-kind on preferential home loans is being reduced from 6 April 2000. The specified rates will be:
Home Loans 4% (previously 6%)
Other Loans 10% (unchanged)
Childcare
Capital Allowances
Accelerated Capital Allowances are available on expenditure incurred on or after 1 December 1999 on the construction, refurbishment or conversion of a crèche or nursery i.e. 100% of expenditure may be written off in Year 1. This is subject to clearance by the EU.
Cars
The cost threshold for capital allowances for new cars and running expenses for all cars has been increased from £16,000 to £16,500. This new limit will apply to expenditure incurred on or after 1 December 1999.
Farming
Farmyard Pollution Control
The scheme of accelarated capital allowances for expenditure on pollution control facilities on farms is being extended to 5 April 2003. From 6 April 2000 the expenditure limit is increased from £30,000 to £40,000.
Multi-Storey Car Parks
The qualifying period for expenditure incurred on qualifying multi-storey car parks situated outside the county boroughs of Dublin and Cork has been extended to 31 December 2002 where 15% of the total project cost is incurred by 30 September 2000.
Withholding Taxes
The rate of withholding tax on professional services and dividend income is being reduced from 24% to 22% with effect from 6 April 2000.
Deposit Interest Retention Tax
The standard rate of DIRT is being reduced from 24% to 22% with effect from 6 April 2000.
Film Relief
The period for investing in qualifying films is extended to 5 April 2005.
Investment Products
The rate of tax charged on income and gains of Life Assurance linked investment products, unit trusts and other collective investment products is being reduced from 24% to 22% from 6 April 2000.
New taxation rules will apply from 1 January 2001 to such products. At present the tax is calculated annually by reference to the income and gains of the product. From 1 January 2001 tax will be automatically deducted by the insurance company at maturity or exit from the investment. The investment return rate of charge will be the standard rate of tax plus 3%. New funds can opt for the new system after 1 April 2000.
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