There will be an increase from 12.5% to 13.5% in the specified interest rate to be used in calculating the taxable benefit arising on preferential loans.
Where the preferential loan is a home loan, the specified rate will be decreased from 5% to 4%.
Its important to note in this time of low interest rates that a loan is not a preferential loan if the rate of interest is not less than the interest rate charged on similar loans to other individuals (Individuals who are not employee’s or their spouses)
Changes will be put in place in 2014 to the maximum allowable pension fund at retirement.
Tax relief on pension contributions will only serve to subsidise pension schemes that deliver
income of up to €60,000 a year. This will take effect from 1 January 2014.
Tax relief on pension contributions will continue at the marginal rate of tax. The Pension Levy
announced as part of the Jobs Initiative will not be renewed after 2014.
About 27,000 people would be affected by the €60,000 cap – essentially those earning at or above €125,000 a year in the public or private sector according to chief executive of the Irish Association of Pension Funds (IAPF) Jerry Moriarty in the Irish Times