Tax breaks: Higher earners in frame as 25 'legacy' reliefs to go
Published 08/12/2010 | 05:00
A TOTAL of 25 mainly property-related tax breaks are to be abolished or curbed in a move designed to hit high earners.
Finance Minister Brian Lenihan said last month he would abolish or restrict 16 of these tax breaks, but he increased the number to 25 yesterday.
The minister said those availing of "tax-incentive schemes" had to contribute more.
He imposed restrictions on how much companies can write off against tax across a range of areas.
For example, Section 23 relief, which applies to properties in certain designated areas of the country, will be severely cut back.
The minister is also forcing investors to claim relief on certain projects by 2014 or the benefits will dry up.
Mr Lenihan described the reliefs he was tackling as "legacy" reliefs.
The Chartered Accountants of Ireland said many investors relied upon the various reliefs to pay off their loans.
"This could lead in some instances to defaults on loan arrangements," said a spokesperson for the organisation.
"Ironically, the full abolition of the incentives will have a greater practical effect on smaller investors rather than on larger investors.
"One certainty is that it will make prospective investors in any future tax incentive scheme very wary indeed," it added.