- Income Tax
- Capital Gains Tax
- Capital Acquisitions Tax
- Nursing Homes Support Scheme
- Other Useful Information
Copies of the leaflets and forms which are referred to can be downloaded, or alternatively phone our Forms and Leaflets Service at 1890 306 706. If calling from outside the Republic of Ireland: LoCall +353 1 702 3050. This is an automated telephone service and you will be asked to give your name, address and the title of the leaflet you want.
A full list of all tax credits is available in Leaflet IT1 - Tax Credits, Reliefs & Rates.
This section describes the tax credits and reliefs which may reduce the amount of tax which you will have to pay on your income.
- Age Tax Credit - is available where either you, your spouse or civil partner reach 65 years of age at any time during the tax year. Leaflet IT45 - Tax Credits and Reliefs for Over 65's.
- Blind Person's Tax Credit - is available if you are regarded as blind. This credit is also due for your spouse or civil partner if he or she is regarded as blind. Leaflet IT 35 - Blind Persons Allowances & Reliefs.
- Deeds of Covenant - relief of up to 5% of your total income is available on a Deed of Covenant in favour of a person aged 65 and over. This 5% restriction does not apply where the person receiving the covenant is permanently incapacitated. Leaflet IT 7 - Covenants to Individuals (PDF, 809KB).
- Dependent Relative Tax Credit - is available if you maintain at your own expense: a
- son or daughter or a child of your civil partner who resides with you and on whose services you are compelled to depend due to old age or infirity.
- widowed father or mother of yourself, your spouse or civil partner or a parent of your civil partner who is surviving civil partner, regardless of the state of his or her health.
- relative, including a relative of your spouse or civil partner, who is unable, due to old age or infimity, to maintain himself or herself. Leaflet IT 46 - Dependent Relative Tax Credit (PDF, 493KB).
- Employed Person taking care of an incapacitated individual - if you, your spouse or civil partner are incapacitated, and you employ someone to care for the incapacitated person, you can claim for the cost of the employment. This relief is also available to family members who employ a carer. Leaflet IT 47 - Employed Person Taking Care of an Incapacitated Individual (PDF, 847KB).
- Service Charges - relief is available if you pay service charges in full and on time. Alternatively, if a son or daughter who lives with you pays the service charges, they may claim the relief. This relief is no longer available for Service charges paid after 31 December 2010.Leaflet IT 27 - Tax Relief for Service Charges (PDF, 483KB).
- Exemption - you and/or your spouse or civil partner may not have to pay tax if your total income is less than a certain limit. The limits vary depending on your age and civil status. Marginal Relief is available where your total income is slightly over the exemption limit. Leaflet IT 8 - Income Tax Exemption & Marginal Relief.
- Health or Medical Expenses Relief - is available for most unreimbursed, medical (including nersing home fees) and certain dental expenses.
Principal Private Residence
If you sell your home (including grounds of up to one acre) and the house has been occupied as your sole or main residence throughout your period of ownership you may be entitled to full Principal Private Residence relief and thus exempt from capital gains tax on the sale. Examples of where this relief may be reduced would be where the home has also been used for business purposes or is being sold as development land.
Disposal of a Business or Farm
If you are aged 55 to 66, you may be entitled to relief from Capital Gains Tax on the sale or transfer of assets used for the purposes of farming or a trade, carried on by you, or of shares in your family company which you have owned for at least ten years. This relief is known as retirement relief although it is not necessary to retire in order to obtain this relief.
The relief is subject to a number of conditions. In general, it is not available if the proceeds of sale, or the market value at the date of transfer, exceeds an amount provided for in the legislation. The maximum amount for which relief is allowed is €750,000 although marginal relief may apply on amounts slightly over this amount.
The upper limit for retirement relief for business and farming assets is reduced from €750,000 to €500,000 for individuals over 66 years. However, the current upper limit of €750,000 continues to apply for a transitional period of two years for individuals currently aged 66 or who reach that age before 31 December 2013.
Disposal of a Business or a Farm to a Child
Full retirement relief may be claimed by an individual aged 55 to 66 on the disposal to their child, of the whole or part of their qualifying assets.
An upper limit of €3m on retirement relief for business and farming assets disposed of within the family applies where the individual transferring the assets is aged 66 or over. However, the current unlimited amount continues to apply for a transitional period of two years for individuals currently aged 66 or who reach that age before 31 December 2013.
This relief is clawed back where the child disposes of the asset within six years from the date of acquisition.
For more information, see Leaflet CGT1 -'Guide to Capital Gains Tax'.
Gifts or inheritances from a spouse are entirely exempt from Gift Tax or Inheritance Tax regardless of the amount involved. Each child can receive gifts or inheritances of up to €414,799 in 2010, tax free from their parents provided no previous gifts or inheritances were taken by the child since 5th December 1991.
- See Information Leaflet Gift Tax - CAT 1
- See Information Leaflet Inheritance Tax - CAT 2
- Thresholds for Capital Acquisitions Tax.
Dwelling House Exemption
An exemption from Gift Tax or Inheritance Tax in respect of a dwelling house exists where the beneficiary has been living in the house for 3 years prior to the gift or inheritance and stays there for a further 6 years. The beneficiary cannot have an interest in any other residential dwelling. In the case of a gift, this exemption will not apply if the disponer lived in the house for the 3 year period before the gift, unless the person giving the gift was required, due to ill-health or infirmity, to depend on the services of the donee for that period.
Exemption Relating to Medical Expenses of Incapacitated Persons
If you are permanently incapacitated because of physical or mental infirmity, a gift or inheritance taken by you to meet your medical expenses (including for example the cost of nursing home care) is exempt from gift or inheritance tax.
The Nursing Homes Support Scheme is a scheme of financial support for people who need long-term nursing home care. Under the scheme, a person can make a contribution towards the cost of their care and the State will pay the balance. This applies whether the nursing home is public, private or voluntary.
Individuals who are assessed as requiring long-term residential care will undergo a financial assessment carried out by the Health Service Executive (HSE).
Full details of the scheme can be found on the Department of Health & Children website www.dohc.ie.
Ancillary State Support
Under the scheme, individuals will contribute 80% of assessable income and 5% of the value of any assets in excess of the asset disregard per annum. The asset disregard is the amount of one's assets that is totally excluded from the means assessment - €36,000 for an individual or €72,000 for a couple. If the assets include land and property, the 5% contribution based on such assets can be deferred (deferred contribution). This means it does not have to be paid during the person's lifetime [monies advanced by way of ancillary State support] and may be collected from their estate. The principal private residence (PPR) will only be included in the financial assessment for the first 3 years of the person’s time in care.
Revenue is responsible for collection and recovery of monies advanced by way of ancillary State support.
When monies advanced become due and payable the HSE will notify the person responsible for the making of the payment - known as the relevant accountable person - as well as notifying Revenue of the amount due. Revenue will then contact the person to make arrangements for the payment.
A payment slip to make the payment will be provided to the person. The payment slip is also available on the Revenue website: Nursing Homes Support Scheme Payslip (PDF, 41KB).
Deposit Interest Retention Tax (DIRT) is deducted at source from interest paid on most deposits held by Financial Institutions. There is no further tax liability on this interest but it must be declared on your annual tax return. If your total income is below your exemption limit a refund of DIRT can be claimed if you, your spouse or civil partner are aged 65 or over, or permanently incapacitated by reason of mental or physical infirmity.
To claim a refund of DIRT use Form 54D (PDF, 461KB).
Special Savings Accounts
Special Savings Accounts are subject to DIRT deducted at a special rate. There is no further tax liability on this interest and it need not be declared to Revenue unless a refund of the DIRT is being claimed. The conditions necessary to qualify for a refund are outlined in the paragraph above.
Social Protection Pensions
Pensions paid by the Department of Social Protection are taxable and should be declared in your tax returns. Tax is not deducted at source by the Department. If this Pension is your only source of income it is unlikely that there will be any tax due as your tax credits or exemption limit will generally cover this income. If you, your spouse or your civil partner have income in addition to your pension your tax credits will be reduced by the amount of your Social Protection pension for PAYE purposes. If you pay tax under self assessment your Social Protection pension will be included in your notice of assessment.
See also list of Social Insurance Pensions and Allowances 2005/2009 (PDF, 53KB).
US Social Security Pensions
From 6 April 1998 an Irish resident in receipt of a United States social security pension is chargeable in Ireland on such pension for income tax purposes. The pension should be declared on your annual tax return. If you have other income which is subject to PAYE your tax credits will be reduced by the amount of your US Social Security pension to collect the tax due. If you pay tax under self assessment the pension will be included in your notice of assessment.
Planning for Retirement
If you are aged 66 or over you are not liable to pay PRSI.
Universal Social Charge
Universal Social Charge (USC) is a tax payable on gross income, including benefits received from your employer, after any relief for certain capital allowances, but before pension contributions.
- Where your total income for the year does not exceed a certain amount
- all Department of Social Protection pensions
- income already subjected to DIRT.
Frequently asked Questions (FAQs) on USC (PDF, 686KB)