As we approach the Preliminary Tax payment date for 2010, it is important to prepare computations early for taxpayers caught by the restriction. This is to help ensure that they can raise the necessary funds in time to pay the income tax liabilities falling due on 31 October.

The 2010 Finance Act changed the High Earners Restriction. Broadly, where income is €125,000 or more, and the aggregate restricted reliefs are €80,000 or more, the restriction may apply. Cases should be reviewed as the restriction will undoubtedly apply to a far greater number of individuals than before.

There was often a reliance on the tax reliefs available to meet the funding requirements of the capital investment which created the relief in the first instance. Capital investments were rewarded by the availability of tax relief in areas where national policy dictated there was a shortfall – rental accommodation, derelict areas of towns and cities, hospitality and leisure industries, healthcare. Tax policy dictated that capital investment could not be syndicated in any meaningful way, thus restricting the availability of tax relief to individuals with existing high levels of income.