I propose to take Questions Nos. 147 and 162 together.
I am advised by Revenue that the information requested by the Deputy as regards the comparison between Irish and United Kingdom (UK) Capital Gains Tax (CGT) rates and CGT for entrepreneurs in Ireland and the UK is set out in Tables 1 and 2 respectively and personal income tax rates for the year 2016 in Ireland and the UK are set out in Tables 3 and 4 respectively.
The taxation of share options in Ireland and the UK can depend on a number of factors such as the nature of the share option scheme, the size of the company, the option price of the shares on grant and the length of the option. As such, direct comparison of the taxation of share options in different jurisdictions is not possible. The Deputy may be aware that the Department is currently conducting a review of the tax treatment of share-based remuneration, which included a public consultation seeking input from interested parties.
Table 1
CGT rates in Ireland
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CGT rates in the UK
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33% rate applies generally. However, a rate of 40% applies to certain foreign life assurance policies and foreign investment products. Rates of 12.5% and 15% apply to certain venture capital fund managers.
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10% or 20%, depending on the individual's tax band except for second homes where rates are 18% or 28%, depending on the individual's tax band. (The rates were 18% or 28% up to 5 April 2016, depending on the individual's tax band.)
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Table 2
CGT for entrepreneurs in Ireland
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CGT for entrepreneurs in the UK
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20% rate applies to gains on qualifying assets up to a lifetime limit of €1m.
Qualifying assets must have been owned for a continuous period of 3 years in the 5-year period prior to disposal.
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10% rate applies to gains on qualifying assets up to a lifetime limit of £10m.
Qualifying assets must have been owned for a minimum period of 1 year prior to disposal.
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Where the qualifying assets are shares in a company, individual must own 5% of the ordinary shares in the company.
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Where the qualifying assets are shares in a company, individual must own 5% of the ordinary shares in the company.
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Table 3
Ireland 2016
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Taxable Income
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Tax Rate [1]
|
Single, Widowed or a Surviving Civil Partner without qualifying children
|
Up to €33,800
Balance
|
20%
40%
|
Single, Widowed or a Surviving Civil Partner qualifying for Single Person Child Carer Credit
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Up to €37,800
Balance
|
20%
40%
|
Married or in a Civil Partnership - (one Spouse or Civil Partner with income)
|
Up to €42,800
Balance
|
20%
40%
|
Married or in a Civil Partnership - (both Spouses or Civil Partners with income)
|
Up to €42,800 (with an increase of €24,800 max)
Balance
|
20%
40%
|
Table 4
UK 2016
|
Taxable Income
|
Tax Rate
|
Personal Allowance
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Up to £11,000
|
0%
|
Basic Rate
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£11,001 to £43,000
|
20%
|
Higher Rate
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£43,001 to £150,000
|
40%
|
Additional Rate
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over £150,000
|
45%
|
All taxes are reviewed as part of the annual Budget and Finance Bill process. Changes to tax policy are generally announced in the Budget in October each year and to the extent that changes, if any, in the areas of tax specified in the question are to be made, these will be made known in the forthcoming Budget.
[1] In addition to income tax, the Universal Social Charge (USC) applies to income from 2016 as follows: At 1% on income up to €12,012, 3% on income from €12,012 to €18,668, 5.5% on income from €18,668 to €70,044, 8% on income above €70,044. A rate of 11% applies to non-PAYE income above €100,000. The threshold at which total income is exempt from USC is €13,000.