Financial Resolutions, 1978: Financial Statement, Budget, 1978. - Premiums on life assurance policies
The income tax code gives generous tax relief in respect of premiums paid by individuals on life assurance policies. Up to 1953 the fraction of premium qualifying for relief was one-half. In the budget of that year, with a view to ensuring the development of the Irish assurance industry, the qualifying fraction in the case of new policies with Irish companies was increased to two-thirds.
The Irish life assurance companies have improved their share of the market to the point where they now account for over 60 per cent of premium income. Moreover, investment in the Irish economy by non-Irish companies, now exceeds 90 per cent of their Irish liabilities.
The Government have accordingly decided that, in the case of all policies taken out after today, the fraction of life assurance premiums qualifying for tax relief will be a uniform one-half. The tax relief will continue to be available at a taxpayer's marginal rate of tax.
As I have mentioned, the tax treatment of life assurance is generous and life assurance can be expected to remain a specially attractive means of long-term savings and family protection.