Finance Bill 2015 has now been passed by Dáil Eireann and has moved to debate in the Seanad, which cannot amend the Bill. The Bill is expected to be signed into law by the President before the Christmas holidays and therefore enacted as Finance Act 2015.

You can read our coverage of the Finance Bill as initiated in the November issue of tax.point. Mark Doyle, Director of Doyle Tax Consultants Ltd, also featured an article on the capital taxes measures in the Bill in the November issue.

A number of amendments were made to the Bill as initiated at Committee Stage and Report Stage in the Dáil.

Committee Stage Amendments

Among the main amendments included an extension of the tax free voucher regime to include other benefits in non-cash form.

Before publication of the Committee Stage amendments the Minister for Finance announced his intention to bring forward the commencement date of the legislation providing that employers may give a qualifying voucher worth up to €500 to their employee free of income tax, PRSI and USC. The Committee Stage amendments provide that this measure will come into operation on 22 October 2015.

The other main Committee Stage amendments include:

Expenses payments for relevant directors: the full time working director requirement is deleted. The definition of “travel” is extended to include travel by motorcycle. 1 January 2016 is inserted to clarify that the measure applied to payments made on and from that date.

Expenses of State Examinations Commission examiners: a new section is inserted into the TCA 1997 to provide for an income tax exemption for payment of travel and subsistence expenses where certain conditions are satisfied.

Farm partnerships: a number of amendments are proposed concerning operation of the measure and appeals.

Knowledge Development Box: several technical amendments to the regime are proposed. The period available to make a claim is doubled to 24 months from the end of the accounting period to which the claim relates.

CGT entrepreneurial Relief: new definitions are proposed which relax some of the punitive conditions of the relief as initially proposed. The full time working director requirement is removed and a new definition of ‘qualifying person’ is inserted. Broadly a qualifying person is a director or employee of the company who spends not less than 50 per cent of their working time in a managerial or technical capacity for three years in the five years prior to the disposal. The definition of holding company is changed to one which holds shares in one or more 51 per cent subsidiaries.

Confidentiality of taxpayer information: we told you last month that the Minister announced the introduction of an amendment to section 851A TCA 1997 which “will allow Revenue disclose confidential taxpayer information to the Law Society of Ireland in such circumstances where the tax adviser or agent is a solicitor, ensuring equal treatment across the broad range of tax advisers”. An amendment is proposed to the definition of professional body in section 851A TCA 1997 to include the Law Society of Ireland.

Report Stage

The most notable amendment at Report Stage is the introduction of a full tax deduction for mortgage interest incurred by a landlord where the rental property is leased to a tenant receiving housing benefit. The benefit of the tax relief appears to be deferred until a three year qualifying period has expired.

Speaking during the Report Stage debate about the change to interest deductibility, the Minister for Finance said:

“The landlord will be able to avail of the increase in interest deductions from 75% to 100% after the end of the three-year undertaking and where other conditions have been fulfilled. It will be provided on a retrospective basis in that the additional annual 25% deduction for the three-year period will be rolled up and allowed as a deduction against rental profits in year four. This will be in addition to the 75% interest reduction that will be available to the landlord in year four in the normal way.

The new scheme includes a sunset clause specifying 31 December 2019 as the latest date by which a three-year undertaking period to rent to social housing support tenants can commence. The aim is to encourage landlords to buy into the scheme as early as possible so that they may be in a position to commit to a second three-year period and avail of a second tranche of additional rolled-up interest reduction. In essence, a landlord will be able to avail of the scheme for a maximum period of six years, but this will be the case only where the first three-year undertaking is commenced not later than the end of 2016. The legislation includes provisions to ensure a landlord will not necessarily lose the additional interest reduction if, say, a tenant ceases to qualify for social housing supports or a tenancy in respect of a social housing tenant ceases before the three-year commitment period ends.”

Amendments proposed by the Minister for Finance at Committee Stage and Report Stage are available on the Oireachtas website. You will also find the Finance Bill as passed by Dáil Eireann on the Oireachtas website.