Tax Credits and Reliefs for Over 65's - IT 45
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This is a guide to the tax credits and reliefs available to people aged 65 or over.
Depending on your personal circumstances, you may be entitled to claim certain tax credits and reliefs. These tax credits and reliefs have the effect of reducing the amount of tax payable on your income.
A full list of all tax credits is available in leaflet: IT1 - Tax Credits Reliefs & Rates.
What Tax Credits and Reliefs are available?
A complete list of all tax credits is available in leaflet: IT1 - Tax Credits Reliefs & Rates.
The Age Credit is available when either you, your spouse or civil partner are aged 65 or over, or reach 65 years of age, at any time during the tax year.
Blind Person’s Tax Credit
The Blind Person’s tax credit is available if you are regarded as blind. This credit is also due if your spouse or civil partner is regarded as blind.
For more information, see leaflet IT 35 - Blind Person’s Tax Credits & Reliefs.
Deeds of Covenant
Tax relief of up to 5 per cent of the covenantor’s total income is available on a Deed of Covenant
in favour of a person aged 65 and over. Unrestricted tax relief can be claimed on Covenants in favour of permanently incapacitated adults.
For more information, see leaflet IT 7 - Covenants to Individuals.
Dependent Relative Tax Credit
You can claim the Dependent Relative tax credit 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 infirmity
- widowed father or mother of yourself, your spouse or civil partner or a parent of your civil partner who is a 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 infirmity, to maintain himself or herself
For more information, see leaflet IT 46 - Dependent Relative Tax Credit.
Employed Person taking care of an Incapacitated Individual
You, your spouse or civil partner may claim tax relief in respect of the cost of employing a person (including a person whose services are provided by or through an agency) to take care of either:
- a family member (including yourself, your spouse or civil partner) who is totally incapacitated by reason of physical or mental infirmity, or
- a relative who is totally incapacitated by reason of physical or mental infirmity. Relative in this context includes a relation by marriage or civil partnership and includes an individual in respect of whom the claimant is or was the legal guardian.
Note: Relief is not due if the carer is employed as a housekeeper only, or if the Dependent Relative or Incapacitated Child tax credit has been given in respect of the employed carer.
For more information see leaflet IT 47 - Incapacitated Person - Allowance for Employing a Carer.
You may not have to pay income tax if you are aged 65 or over and your total income is less than a certain limit. If you are married or in a civil partnership, it is the age of the older spouse or civil partner that is relevant. For example if you are 63 and your spouse or civil partner is 67, you are entitled to married persons’ or civil partners’ exemption limits.
If your income is up to twice the amount of the relevant exemption limit, you may be entitled to marginal relief, however, it will only be given where it is more beneficial to you than your tax credits.
Health / Medical Expenses Relief
Tax relief can be claimed for amounts you spend on qualifying medical expenses (including nursing home fees and certain dental treatments) for yourself or for any other person.
For more information, see leaflet IT 6 - A Guide to claiming Health or Medical Expenses Relief.
Rent Relief for Private Rented Accommodation
Rent Relief is available, up to a maximum amount, in respect of rent paid for private rented accommodation. If you are aged 55 or over you qualify for a higher relief.
Note: Rent relief only applies if you were renting a property on 7 December 2010. No credit is due if you began renting after that date.
Complete Form Rent 1 - Claim for Rent Relief on Private Rented Accommodation (PDF, 266KB) to claim this relief.
How do I Claim Tax Credits?
Certain tax credits cannot be claimed online and a claim form must be completed and submitted to your Revenue office. The relevant claim forms are available either:
- on this website – select Claim forms, or
- attached to the Revenue information leaflet dealing with the subject, or
- by calling Revenue’s LoCall Forms and Leaflets ordering service on 1890 306 706 (ROI only) or + 353 1 702 3050 (from abroad).
If there is no claim form required you can apply for the tax credit through MyEnquiries in myAccount.
If you are self-employed, tax credits can be claimed by completing the relevant section on your annual tax return.
Principal Private Residence
If you sell your house, including grounds of up to one acre (0.4047 hectares) 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 therefore exempt from capital gains tax on the sale. The relief is available to all vendors selling their home, there are a number of conditions being met - the main one being is that the house is the vendor’s own or main residence. This relief may be reduced 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 or over, 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.
The upper limit of €750,000 is reduced from €750,000 to €500,000 for individuals aged 66 or over. Marginal relief may apply where the amount is slightly over €750,000 or €500,000, as the case may be.
Disposal of a Business or a Farm to a Child
Full retirement relief may be claimed by an individual aged between 55 and 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.
This relief is clawed back where the child disposes of the asset within six years from the date of acquisition.
Transfer of a Site from a Parent to a Child
Exemption from capital gains tax is available where a parent transfers a site to a child to enable the child construct a dwelling house for use as his or her only or main residence. In this context, a transfer includes a transfer by both parents to their child at the same time. The value of the site must not exceed €500,000 and the size of the site must not exceed 1 acre (0.4047 hectares) excluding the area of the house. The exemption may be clawed back in certain circumstances.
Notes: Principal private residence relief or relief due on the transfer of a site to a child applies to all individuals and is not restricted to those individuals over a certain age.
- Retirement relief can be claimed once you are aged 55 or over.
- The transfer of an asset (where no relief is due, irrespective of the age of the disponer) between connected persons is regarded as a disposal by the donor at market value and is liable to capital gains tax on the gain regardless of the amount of consideration (if any) received.
For more information, see CGT1 - Guide to Capital Gains Tax (PDF, 471KB).
Gift Tax or Inheritance Tax
Gifts from a spouse if taken after 30 January 1990 and gifts from your civil partner if taken after 1 January 2011 are entirely exempt form gift tax regardless of the amount involved.
Similarly, inheritances are exempt from inheritance tax if taken after 30 January 1985 from your spouse and 1 January 2011 from your civil partner. A child is entitled to a Group A tax free threshold in respect of gifts and inheritances taken from his or her parent(s).
A child of a civil partnership, whether it is your child or the child of your civil partner, is entitled to a Group A tax free threshold in respect of gifts and inheritances taken from either or both partners in a civil partnership.
All previous gifts and inheritances taken by a child since 5 December 1991 are taken into account in arriving at the tax free threshold.
The above provisions apply to all and are not restricted to individuals over a certain age.
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 three years prior to the gift or inheritance and stays there for a further six 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 three 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.
For more information on Capital Acquisitions Tax:
- see: Capital Acquisitions Tax, or
- telephone: LoCall 1890 20 11 04, or if calling from outside the Republic of Ireland: +353 1 865 5000, or
- use our MyEnquiries online service to contact us. MyEnquiries can be accessed through myAccount.
Deposit Interest Retention Tax (DIRT) is deducted at the source from interest paid on most deposits held by financial institutions such as Banks, Building Societies, the Post Office Savings Bank and Credit Unions. There is no further tax liability on this interest but it must be declared on your annual tax return.
You can apply directly to your financial institution to have the interest paid without deduction of DIRT where you satisfy the following conditions,
- you, your spouse or civil partner are aged 65 or over during the year and
- your total income for the year, (including your spouse's or civil partner's income) is below the relevant annual exemption limit.
Note: Your total income is essentially your gross income from all sources (for example pensions, deposit interest, etc.). The relevant exemption limit is increased if you have dependent children.
The current annual exemption limits are listed in Revenue's information leaflet: IT 1 - Tax Credits, Reliefs and Rates.
You must complete the DE1 Declaration Form (PDF 216KB).
A separate declaration form is required from the account holder for each account held with each financial institution.
Where DIRT has been deducted during the year and you satisfy the above conditions you can claim a refund of this tax after the 31st of December by completing Form 54 Claims (PDF, 204KB).
Department of Social Protection (DSP) Pensions
Pensions paid to you, your spouse or civil partner by the Department of Social Protection (DSP) are taxable and should be declared to Revenue, as income tax is not deducted at source by the DSP.
You can declare this additional income either:
- using PAYE Services – in myAccount,
- by completing an annual tax return, (online forms are available in PAYE Services in myAccount or in ROS)
- telephone our Revenue LoCall service.
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 it. If you, your spouse or 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, you must declare the amount of Social Protection pension you, your spouse or civil partner receive on your annual tax return.
Local Property Tax
An annual local property tax (LPT) charged on all residential properties in the State came into effect in 2013. You are a ‘liable person’ for LPT if you own a residential property on the ‘liability (or ownership) date’. From 2014 on, the liability date is always 1 November in the preceding year. So for 2015 the liability date was 1 November 2014.
If a property is a residential property on the liability date in any year (since 2013) it is a relevant residential property and is chargeable to LPT.
Revenue offers a range of methods for paying the tax. You can opt to make one single payment or you can phase your payments in equal instalments.
Certain properties are exempt from LPT and some people may be able to defer payment of the tax if they meet specified criteria.
You can find out more by calling the LPT helpline on 1890 200 255.
If you are aged 66 or over you are not liable to pay PRSI.
Further information regarding PRSI is available from the Department of Social Protection at: 1890 662 244 or visit www.welfare.ie.
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.
USC exempt categories:
- Where your total income for the year does not exceed a certain amount
- All DSP pensions
- Income already subjected to DIRT.
For further details and Frequently Asked Questions (FAQs) on USC see: Universal Social Charge FAQs (PDF,1.11MB)
Time limit for Repayment Claims
A claim for repayment of tax must be made within four years after the end of the tax year to which the claim relates. For example, claims for 2013 must be made by 31 December 2017. Please note you must have paid income tax during the year of your claim in order to receive a repayment. If you owe income tax to Revenue for an earlier year, your repayment may be reduced by this amount.
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This leaflet is for general information only. For further information, phone your Revenue LoCall service.
Please note that the rates charged for the use of 1890 (LoCall) numbers may vary among different service providers.
If you are calling from outside the Republic of Ireland, please phone + 353 (1) 702 3011.
This leaflet is intended to describe the subject in general terms. As such, it does not attempt to cover every issue which may arise in relation to the subject. It does not purport to be a legal interpretation of the statutory provisions and consequently, responsibility cannot be accepted for any liability incurred or loss suffered as a result of relying on any matter published herein.