Look at Budget day as the deadline for transferring assets to the next generation

THE date for Budget 2012 has been announced as Tuesday December 6 and, for anyone considering the transfer of a business or other assets to the next generation, this date should be regarded as a deadline.

Although we cannot be sure what the Budget will contain, we have been alerted to the probability that the very valuable tax reliefs that we use for succession planning will be severely restricted.

Some of the possible changes in the forthcoming Budget include:


The process of raising Capital Gains Tax (CGT) and Gift/inheritance tax (CAT) rates may continue (they have already been raised from 20 per cent to 25 per cent in recent years).

CAT tax-free thresholds to be reduced further (this has already been almost halved since 2009).

Reliefs and exemptions for CGT and CAT to be greatly restricted (this would include CGT retirement relief and CAT agricultural relief).

Stamp duty reliefs are, however, unlikely to be hit.


Interim site value tax to be introduced in 2012 of circa €100 per annum per property/site.

To be applied to all property and land, other than agricultural and commercially rated land.

Final (and much higher) site value tax to be introduced in 2014 when valuations have been completed.


Age credit and age exemptions to be abolished over four years.

Service charges to be abolished.

Further reductions in our personal tax credits.

Further reductions in the amount of income that can currently be earned before going onto the top 41 per cent rate.


At present, you can get a top rate (41 per cent) tax relief on pension contributions. There will probably be a phased introduction of standard-rated ( 20 per cent only) income tax relief on pension contributions from 2012, as follows: 2012 (34 per cent), 2013 (27 per cent) and 2014 (20 per cent).

A further reduction in the Standard Fund Threshold. This is the maximum value of a pension fund for tax relief purposes, with draconian tax rates being applied for pension funds in excess of this Standard Fund Threshold, which is currently €2.3m.


Carbon tax to be increased ( this will affect petrol, diesel and heating oil prices).

Tax-free mileage rates to be reduced further.

Increases in 'stealth taxes' such as car tax, health insurance levy, etc.

On the bright side, there is speculation that stamp duty rates for non-residential property could be cut.

Last year's Budget provided for a severe restriction on property tax reliefs (such as Section 23 type reliefs and capital allowances for hotels, etc.). After much heated discussions, these restrictions were delayed, pending the publication of an 'economic impact assessment'. This forthcoming Budget may give us an update on that economic impact assessment

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