Readers will be aware of the measures introduced by Finance Acts 2006 and 2007 to limit the use of certain tax reliefs and exemptions (known as ‘specified reliefs’) by high-income individuals with effect from 1 January 2007. Each year a report is issued showing the effects of the Restriction of Reliefs.

The aim of the restriction, as provided for under Chapter 2A Taxes Consolidation Act 1997 was to ensure that individuals subject to the full restriction would pay an effective rate of tax of approximately 20 per cent. Finance Act 2010 introduced further restrictions on the use of specified reliefs for 2010 and subsequent tax years in order to achieve a 30% effective rate of tax for those subject to the full restriction.

The results for 2009 which were published in August show that the overall number of individuals who were subject to the restriction was 452 and that the additional tax yield was €38.86m. The figure for additional tax is slightly down on that arising in 2008 when the amount was €39.68m. However, the total number of individuals subject to the restriction in 2008 was less at 423.

Cases where full restriction and part restriction applies and a comparison of results with 2008 and 2007 are reported on. The use of different “specified reliefs” and the combined amount of the relief are also set out in the Report.

Members should note that the 2009 Report relates to the use of specified reliefs by high-income individuals in 2009 and therefore further restrictions introduced in this area by Finance Act 2010 are not reported on.

The full text of the 2009 Report is available at http://taxpolicy.gov.ie/wp-content/uploads/2011/07/2009-Report-on-Restriction.pdf