Supplementary Budget 2009 - Capital Acquisitions Tax

The new group thresholds that will apply to gifts and inheritances taken on or after 8 April 2009 will be as follows.

Group	Relationship to Disponer	Group Threshold from 1 January 2009 to 7 April 2009	Group Threshold from 8 April 2009
A	Son/Daughter	€542,544	€434,000
B	Parent / Brother / Sister / Niece / Nephew / Grandchild	€54,254	€43,400
C	Relationship other than Group A or B	€27,127	€21,700

The rate of tax on gifts and inheritances taken on or after 8 April 2009 is increased from 22% to 25%.

Income and losses from dealing in residential development land

The special 20% rate applied to the trading profits from dealing in or developing residential development land is being abolished. The income will be charged at the person’s relevant marginal rates of income tax or the 25% rate of corporation tax. This change will apply as regards Income Tax for the year of assessment 2009 and subsequent years and as regards Corporation Tax for accounting periods ending on or after 1 January 2009 (with accounting periods straddling that date being deemed for this purpose to be separate accounting periods).

Where trading losses have been incurred from dealing in or developing residential development land in circumstances where, if trading profits had been made, they would have been eligible to be taxed at 20%, and a claim to use those losses has not been made to and received by the Revenue Commissioners before 7 April 2009, the losses from today will generally only be relievable (on a value basis) up to a maximum of 20%. Where any such loss is a terminal loss, the restriction will be implemented by “ring-fencing” the loss.

Full details of both changes will be contained in the Finance Bill.