New legislation has been published  to allow people entering into civil partnerships to avail of the same tax treatment as other married couples. The Civil Partnership bill was published on 13 June 2011 and is to give legal effect to the objectives announced by the previous government.

Included in the legislation are certain changes to allow for long-term cohabiting couples, though it stops far short of granting such couples the same tax rights as those in civil partnerships or marriage. The changes mainly involve protection in the case of the death of a partner and in the case of a financially dependent co-habiting partner when a long-term relationship breaks down.

Below is a summary of the main effects from a tax perspective:

Income tax:

• Civil partners will now be able to allocate tax credits and bands to the same degree as other married couples
• There will be no change for co-habiting couples – both will continue to be assessed singly.

Transfers of assets:

• As with married couples, civil partners will be able to transfer assets to each other without triggering charges to capital taxes, including on the death of either spouse.
• Co-habiting couples will continue to be subject to normal rules, except on death where the surviving member of the relationship was financially dependent on the deceased.

Separation and divorce

• Civil partners will be able to avail of the same tax treatment as that afforded to married couples
• Financially dependent partners in a co-habiting relationship will be able to claim a form of compensation in the event the relationship breaks down.

Revenue has published detailed FAQs on the two main topics (click to download):

• Taxation-civil-partnerships FAQs
• Cohabitants FAQs

Revenue have issued eBrief 34/11 and Information Note No.3, providing further detail on the new RCT regime. The main points can be summarised as follows:

• The new scheme is expected to be introduced on 1 January 2012;
• All contact will between principal contractors and Revenue will be online;
• Mandatory online filing will apply, though Revenue indicate they will make an exception for 2011 RCT35s;
• A new rate of 20% will be introduced.

For further information, click on eBrief 34/11 and Information Note No.3.

Owners of second hand properties should be aware of the non-principal private residence charge of €200 payable since 31 March. The payment window for the NPPR charge expires on 30 June, after which an extra charge of €20 per month or part thereof will apply.

Registered and new users can pay online on the NPPR website, which also contains a comprehensive list of FAQs.

From 1st June 2011, phase 3A of Revenue’s ROS (Revenue Online Services) Registration Process comes into effect. Essentially, this means the following categories of taxpayer come under the mandatory online filing regime from that date:

• All companies
• All trusts
• All partnerships
• Individuals filing a return of payments to third parties [Form 46G]
• Individuals subject to the high earners restriction
• Individuals benefiting from or acquiring Foreign Life Policies, Offshore Funds or other Offshore products
• Individuals claiming a range of property based incentives.

The Revenue report in eBrief No. 32/11 that they have sent letters to 225,000 taxpayers advising them of their obligations and that paper returns will no longer be accepted from those taxpayers who have not been granted an exclusion.

The main exclusion under the regulations allows for those who do not have the capacity to file on line – mainly defined as insufficient access to the Internet and, in the case of an individual, being prevented by reason of age, physical or mental infirmity from filing and paying electronically.

More detail on the eBrief can be found here

The government published the Finance (No. 2) Bill on 19 May 2011 to incorporate schemes announced by Minister for Finance Michael Noonan TD in the Jobs Initiative on 10 May 2011. The main taxation points of the initiative are summarised below.

Excises

• Air travel tax rate to be reduced to 0%
• Commencement date is expected to be 1 July 2011

VAT

• Introduction of a second temporary VAT rate of 9%
• The new VAT rate is to apply from 1 July 2011 to December 2013
• The new rate is aimed mainly at the tourism sector

PRSI

• The lower rate of PRSI is to be halved from 8.5% until the end of 2013 for jobs that pay up to €356 per week (Sub-classes A0 and AX)
• The employer PRSI charge on share-based remuneration introduced in Budget 2011 is to be abolished

Research and development

• The legislation is to be amended to enhance accounting flexibility

Pension funds levy

• The measures are to be funded by 0.6% levy on the market value of assets in private pension schemes approved under Irish tax legislation
• The valuation date for levy purposes is to be 1 January 2011
• The levy is to be temporary and last for 4 years

The details of the employment initiatives and a full transcript of the Minister’s speech can be found here: http://www.finance.gov.ie/documents/publications/reports/2011/Jobinitiative.pdf

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